Comparable, or not.......

From the mailbag (do they still make those?):

"Our agent has used houses from other towns to produce our comparable market analysis. I don't think this is wise, but nothing has sold in this area for a while. What are your thoughts?"

There are a few basic rules when formulating a Comparable Market Analysis. The comparables should be as similar to the subject as possible including year built, square footage, amenities, and definitely location. Sometimes an exact comparable property may not exist. It may be necessary, for example, to compare a 3 bedroom home built in 1986 with a 4 bedroom subject home built in 1986. The 3 bedroom comparable would have to be adjusted up in price (in the market analysis) to become comparable with the subject.

To answer your question, the comparable is not only based on homes that have sold, but also those that are currently listed. Surely there are homes listed in your town that your agent could use as comparables. It may take quite a bit of adjustment, but can be done. Using a comparable in another town is difficult because of the number of variables that cannot be adjusted or factored into the analysis. We've all heard "location, location, location" but can you put a price tag on the location of one town over another? We can do that with a lot that is on a body of water versus a lot that is land-locked, but not whole towns!

I would ask your agent to get a "Broker's Opinion of Price" which is similar to an appraisal (not called an appraisal) and is generated by the Broker. Or, you can pay for and obtain an appraisal of your home to support your list price.

Good luck and thanks for asking!