Get To Know Your Competition

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When you, your broker or an appraiser analyze the value of your property, the focus is going to be on closed transactions within a certain time period, but active comparable listings are your competition if you are planning to sell, so they're worth researching.   

Once you determine an acceptable valuation for your property based on the recently sold comps, review the competing inventory for sale. Determine if the active listings are priced in the same general price range, higher or lower.

If active listings are priced higher or lower than recent sales you need to find out why. Watch the market times as well.  Is the market time for active and pending listings longer, shorter or about the same as recent sales?  If listings are suffering from long market times or selling at a faster clip, the market could be shifting and you want to be out in front of it if it is.

In Chicago, comparable listings within a 1-2 mile radius of your property or within a specific neighborhood should be given the most weight.  The typical buyer today is looking for value just as much as location so you’ll also want to consider the active inventory in similar neighborhoods that are outside of a 1-2 mile radius if they are equally desirable and draw from the same pool of buyers.

The key is to understand where the market was (closed transactions) and to try to gauge where the current market is (active/pending listings) so you can price your property competitively and more to the point, accurately so you are successful in your efforts to sell.