Sometimes what is contained in a listing indicates one thing, but the reality is something else, thus using that property as a comp would be a problem. Presenting clients about to invest their life savings into a home with either fuzzy information or blatant untruths can sour them on the buyer agent, who they have hired to look out for them.
REALTORS® should strive to visit properties they will show to clients and compare everything they see with what’s in the listing. They don’t have to confront the listing agent, but should be able to warn clients about anything sketchy before they encounter it. If a new listing pops up and your client wants to see it ASAP, make sure to tell them it will be your first visit there as well.
Homesellers and their agents naturally want to present properties in the best light, and can sometimes put a spin on negative aspects they hope will either be overlooked or shrugged off if potential buyers like the home otherwise. Or they can exaggerate features in the house.
Melissa Hoff with The Hoff Group at Compass in Fort Lauderdale, Florida, chooses comps “based on the properties that have the most similarities and are in similar communities,” she says. “But some can be misleading because the listing agents falsify the bedroom and bathroom counts. So they can be considered inaccurate when the bedroom/bathroom count or even the square footage is misrepresented.
“I recently showed a condo on the beach where the listing stated that there was an extra room that could be considered a bedroom or an office, but in reality, it was just a closet,” explains Hoff.
That is a common exaggeration in a listing, labeling areas as something they could be but probably will not.
Square footage is another tricky proposition to get squared away for precise comps. A homeowner may add what is technically square footage, such as below-grade and unheated areas, which clearly no homebuyer would consider as such.
“Most often, a beautifully finished basement does not have proper egress, which means that square footage cannot be counted,” says Thistle. “This is why many new construction homes have window wells with ladders to the street in the basements. Then the square footage can be counted.”
For a seller’s house, what’s recent in the listing when it comes to renovations? A year? Three years? Eight years? Again, subjective…but not really. A “newish” kitchen or roof could be outdated or needing repair even after five years, depending on use and weather conditions.
Then there’s the age of the house. Agents should make sure they include it when presenting information to clients.
“Comps can be misleading if you don’t have enough filters, especially with the age of the home,” says Armstrong. “It’s not fair to compare a brand-new build to a home that was constructed 30 years ago. And there are many factors that can skew the information.”
Including descriptions. A quiet street? A private location? According to who’s definition? The fact is, a seller embellishing their real estate description can attract the wrong buyers. Plus, it usually goes hand in hand with overpricing the home.
