Rural real estate comps

6 Replies

My wife and I are trying to sell a home in New Washington, Indiana, near Louisville, Kentucky. We're in the process of talking with agents right now to find the best fit. I posted this topic on one agent a few weeks ago:

http://www.biggerpockets.com/forums/21/topics/129173-is-this-agent-commission-ok-normal

As for the background on the property, it is a 2010 built 2,000 sqft two story 3/2.5/2 with the bedrooms being on the second floor. There is also a game room/open area between the three bedrooms. It sits on 1/2 an acre. It's about 40 minutes from downtown Louisville. It has been appraised at $163k

We've just talked to three realtors with the first being the 8% commission realtor in the referenced BP post. One of the other realtors suggested a list price of $145k and to come down if needed. The last suggested we list for $130k which just seems crazy to me. Being that the property is in a rural area, there aren't many comps. the realtor that suggested $130k had a 1955 built home as one of the comps.

So, what is the best way to comp a new and nice property when there aren't many similar properties in the area? Obviously I want to be realistic on the sales price but I do not want to settle for a $30k+ discount on the home price when reliable comps cannot be found. Thanks!

When was it appraised at $163K ?

An appraisal is only good for a limited time.

It may not be a matter of you settling for a $30K discount. It may be that your home is worth less NOW than when it was appraised. OTOH, it could be worth the same or more.

As far as finding comps, you may have to go further away, and/or use homes that are not really good matches and make adjustments to compensate for the differences. 

Have the Realtors told you the addresses and specifics for the properties they are using to come up with their values? Because there is a pretty wide range of suggested list prices, I would suggest talking to more Realtors. 

Don't go with the Realtor that suggest the highest price simply because they suggested the highest price.

Don't go with the Realtor that charges the least commission simply because they charge the least commission.

Find the one that is worth what they charge and knows the area, has the comps to back up their suggested list price.

Best of luck and good wishes for a speedy sale!

Thanks @Mark Brian

The appraisal is a few years old so we're going to talk with a few more realtors and see where we go from there. Also, would a realtor's CMA be the same as getting an appraisal?

In general, I think an appraisal is more accurate than a CMA. And this is coming from a REALTOR.

@Derrick R.  I would suggest listing on the higher side and see how many showings the market produces.

If you don't get any showings, then it's over priced. If you get showings but no offers, then there's something that needs fixed on the property [usually].

It's easy to come down on price but very hard to go back up once it's listed low.

I think DOM is a good indicator when comps are hard to find. If the end of town you are in is selling fast you can ask a premium (start high). If the DOM is bad then you may have to start lower.

I'm an agent and I think you are doing the right things by interviewing agents. I would ask what each agents time on market is on average for their sold listings and what percentage of the listed price they have sold for. If they are very high on both those metrics you can assume they know how to price a home and should be able to help you in your situation. Cma is not an appraisal, is not official in any way, it is a tool that helps the agent give you a baseline for pricing. There are, however outliers and your home may be one, this happens and it's not something to fear. You just want to have a plan with your agent if you aren't getting showings.

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