{"id":10031,"date":"2020-02-25T09:31:10","date_gmt":"2020-02-25T17:31:10","guid":{"rendered":"https:\/\/www.homelight.com\/blog\/?p=10031"},"modified":"2025-05-29T01:10:24","modified_gmt":"2025-05-29T08:10:24","slug":"pricing-your-home","status":"publish","type":"post","link":"https:\/\/www.homelight.com\/blog\/pricing-your-home\/","title":{"rendered":"5 Challenges That Make Pricing Your Home Harder (And How to Overcome Them)"},"content":{"rendered":"

Some homes are trickier to price than others. Take the Belair, California mansion nicknamed \u201cThe Billionaire,\u201d<\/a> for example. Initially it was listed for $250 million. Months later, brokers representing the extravagant property dropped the price by an astonishing $62 million and told CNBC that in their defense \u201cthere is no comp for a house like this.\u201d<\/p>\n

No kidding!<\/p>\n

“The Billionaire\u201d marks an extreme case (in fact, the mansion was the most expensive listing in the country at one point). But everyday sellers, too, can be an exception to the rule when it comes to pricing.<\/p>\n

So for every challenge that makes pricing your home more difficult, whether it\u2019s a remote location, volatile real estate market, or special features, we\u2019ve culled together the best solutions to nail down market value\u2014no matter how unique the property.<\/p>\n

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Source: (Pxhere)<\/figcaption><\/figure>\n

Challenge #1: There\u2019s a lack of nearby comps.<\/b><\/h2>\n

An experienced agent could price your average dwelling smack dab in a residential neighborhood or cookie-cutter development with a cup of joe and 10 minutes between house showings.<\/p>\n

Compare that to the challenges of pricing outliers: those rural country estates in the middle of nowhere or luxury homes that bear little resemblance to their neighbors\u2019 average homes.<\/p>\n

Between these two different types of pricing situations, comps (or a lack thereof) make all the difference. The question for sellers pricing homes without comps is: How do you place a puzzle piece when there\u2019s no box to go off? That\u2019s when you and your agent will have to get a bit more creative.<\/p>\n

But let\u2019s back up a bit. In the real estate market, \u201ccomps<\/a>\u201d refer to homes that sold within the last 3-6 months and are similar to yours based on a number of basic criteria, including location, size, age, and condition, among others.<\/p>\n

In a comparative market analysis (CMA<\/a>), an agent gathers up as many as 10+ similar properties within a certain neighborhood to come up with a range of values, compiles interior and exterior photos to guide their research, and makes adjustments to your home\u2019s price based on how it compares in upgrades, amenities, and features.<\/p>\n

If there aren\u2019t many recently sold homes near yours that mirror your own property\u2019s characteristics, you can see how it\u2019d be more difficult to determine the fair market value<\/a> of your home. So what are your options if this is the case?<\/p>\n

Pricing solutions for an absence of comps<\/h3>\n

If a lack of recently sold comparable homes is the issue, you\u2019ve got a couple of options. Let\u2019s dive into them:<\/p>\n

Solution 1: Expand the pool of comps either by location or time frame.<\/h4>\n

Note that it\u2019s ideal if comps come from an accurately defined neighborhood, but when that\u2019s not an option, your agent might have to use a larger geographic radius. In the case of rural areas, the nearest comp could be miles away but will at least provide some baseline to work from. Alternatively, an agent might opt to stretch the definition of \u201crecently sold\u201d back to 6-12 months (rather than the ideal 3-6 months) to find comparable properties.<\/p>\n

The difficulty is that these irregular comps will have additional variables to account for in an analysis and require more manual adjustments to nail down a range for your property.<\/p>\n

Another option your agent may use is to look at homes similar to yours that were listed in a specific timeframe, but have not yet sold or were withdrawn from the market.<\/p>\n

By looking at data available on the MLS (Multiple Listing Service)\u2014recent upgrades to the home, offers that were made but either not accepted or withdrawn\u2014your agent may be able to find additional homes that would not ordinarily show up as comps.<\/p>\n

Solution 2: Get a pre-listing appraisal.<\/h4>\n

\u201cIn instances where you have an outlier where there’s not a lot of information, what I would suggest or propose to sellers is that they pay for an appraisal,\u201d says\u00a0Aaron Novello<\/a>, a top-selling agent in Tamarac, Florida<\/a>. \u201cThen we can start at that number and ultimately test it. The marketplace speaks to us quickly in terms of showings and offers.\u201d<\/p>\n

He adds: \u201cIf the buyers are not seeing value, then we’ll know that. We’ll get showings and no offers or very few showings, if any at all. And if that happens, we can make an appropriate adjustment.\u201d<\/p>\n

Check out HomeLight\u2019s 7-step guide for how to get a home appraisal<\/a> you can trust.<\/p>\n

Challenge #2: Your local real estate market is in flux.<\/h2>\n

If your home is in a volatile or fluctuating market, there\u2019s another problem that can make pricing your home challenging: even recent comps may not accurately reflect your home\u2019s current value.<\/p>\n

When prices are on the rise, for example, comps that sold 6 months ago may have gone for a much lower <\/i>price than your home is worth today. And vice versa\u2014if the market is going down, your home\u2019s comps could have sold for more<\/i> than your home is worth today.<\/p>\n

\u201cIn South Florida, there\u2019s a lot of demand for homes that are priced between $200,000 and $300,000,” Novello says. “So when you put a home on the market at that price point, you\u2019ll get maybe 5 offers. That forces people to compete, and raises the price.\u201d<\/span><\/p>\n

Given a few months, that level of competition can have a drastic effect on the real estate market. The biggest challenge in a rising market then becomes whether the house will appraise<\/a> for the price at which it sold.<\/p>\n

Pricing solutions for changing real estate market<\/h3>\n

To settle on a price when the market\u2019s changing, your best options are the following:<\/p>\n

Solution 1: Only pull the most recent comps.<\/h4>\n

Narrow the window for qualified comps to only those homes sold in the past few weeks or at most, the past month. This will help prevent the risk of using dated comps that no longer reflect current market price trends.<\/p>\n

Solution 2: Be prepared to back up your home\u2019s sale price.<\/h4>\n

In the event that your house generated multiple offers that drove up the price, you\u2019ll want to take every possible step to maximize your home\u2019s appraised value.<\/p>\n

This includes presenting to the appraiser proof of upgrades or renovations to the house<\/a> and receipts for new appliance or HVAC installations. You\u2019ll also want to get your place ready for the appraiser\u2019s onsite visit<\/a> like you would for a house showing: tidy up the yard, declutter countertops, and deep clean for a great impression.<\/p>\n

Solution 3: Make sure the appraiser has access to your agent\u2019s comps.<\/h4>\n

Another way to help justify a home\u2019s sale price to the appraiser is to be sure they have access to the same comps that your agent used in their CMA. One missing comp could mean the difference between you and the appraiser seeing eye to eye.<\/p>\n

Solution 4: Have a game plan in the event of a low appraisal.<\/h4>\n

Ultimately if high demand for your house drove up the price beyond market value, there\u2019s a chance that your appraisal could come in the under contract value<\/a>. If you decide not to challenge the appraisal, then be prepared to negotiate with the buyer, whether you ask them to bring additional funds to make up the difference in value or agree to lower the sale price.<\/p>\n

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Source: (American Public Power Association\/ Unsplash)<\/figcaption><\/figure>\n

Challenge #3: Your home is unique in terms of positioning or location.<\/h2>\n

An appraiser will take into account when your home was built, the condition of the roof, the size of the lot\u2014but other factors that impact value are more nuanced.\u00a0This is especially true in terms of location and positioning.<\/p>\n

A house could be identical in size, shape, and condition to another property down the block… yet worth at least 10%-15% less<\/a> due to its positioning next to the freeway.<\/p>\n

Or let\u2019s say your home is built near the water. There are scenic benefits that will raise the value of your home, but there are also issues like susceptibility to floods that could lower the home\u2019s value.<\/p>\n

Homes that are built on a slope, located near an airport, or back up to a main road face create issues when determining an accurate price.<\/p>\n

Solution: Bring in the professional expertise of an appraiser or find an agent with hyperlocal experience.<\/h3>\n

This is another situation in which the help of an experienced, professional appraiser can be helpful. By getting an appraisal before your home goes on the market, you lower the probability that you\u2019ll overprice your home<\/a> and end up having it sit on the market for months<\/a>.<\/p>\n

Another option is to find a real estate agent<\/a> with extensive experience in your area, particularly with selling homes that have unique features.<\/p>\n

\u201cI\u2019ve sold over a thousand properties, so with that experiential knowledge, I kind of know, plus or minus, what an appraiser will give you for certain things,\u201d Novello says. \u201cFrom that we come up with a realistic range. It\u2019s about working with probabilities\u2014what price is the most likely<\/i> to give you your desired outcome, within your desired timeframe?\u201d<\/p>\n

Challenge #4: Your market doesn\u2019t have enough qualified appraisers.<\/h2>\n

When you\u2019re working with a unique property, a pre-listing appraisal can help you accurately price it correctly from the start. But what if there aren\u2019t many experienced appraisers in your area? How do you ward against an inaccurate appraisal?<\/p>\n

According to Bankrate, inexperienced appraisers are a prevalent issue<\/a> in the home-selling space, as \u201cmost lenders work through appraisal management companies, or AMCs, whose pool of residential appraisers includes those with limited training or little familiarity with the geographic area being appraised.\u201d<\/p>\n

Pricing solutions for a lack of experienced appraisers<\/h3>\n

Although you won’t have control over who the lender financing the deal selects as an appraiser, let\u2019s review a couple of ways to make sure your appraiser is qualified to provide an accurate opinion of value should you choose to get a pre-listing appraisal.<\/p>\n

Solution 1: Vet your appraiser candidates with screener questions.<\/h4>\n

American Home Appraisers advises asking your appraiser \u201cscreener\u201d questions<\/a> to make sure you don\u2019t end up with someone who\u2019s untrained or inexperienced. These include things like:<\/p>\n