Once you have the lead it’s now time to begin investigating the lead by comparing the property to other sales in the immediate area. Preferably within a 1/4 -1/2 mile radius from the property if possible. First, look for the exact floor plan. You’ll find this to be easy most of the time, because a lot of the larger neighborhoods have only 4 or 5 models that repeat throughout the development. These will be your best comparables. Look for differences in the properties, like a finished basement, decks and other special features. If you are able to access pictures of these comparables, you will get a great idea of the property value.
If there are no comparables in the radius, look at other comparables based on square footage, number of bedrooms, number of baths, basement, garage and lot size. Some subdivisions have more than one school district; in this case make sure you are comparing properties within the same school district. Price per square foot can be a great way to determine value as well. The goal is to find the most comparable sales to the property.
Make sure to pay attention to days on market (or DOM). If a strong comparable has a lot of days on market (100+) and has had multiple price drops, it can be a sign that the property was listed too high in the beginning. When that happens, it accumulates days on market and this can deter agents and buyers from viewing. The result is that a property will sell for less than what it would have sold for if it was priced correctly in the beginning.
Example: A house sold for $100k with 160 days on the market and 3 price drops. It was originally listed at $115k, reduced to $110k and then further reduced to $105k.This would lead me to believe that I could list for $105k-$108k. That is a bit of a gamble, but if there are strong comps in the area to support this price it could be worth it.