One of the biggest questions I get from clients who are getting ready to put in an offer on an apartment is “How do I know what its really worth?” Deciphering property value is actually less difficult than you might think. When valuing a property, brokers look at two main things: the actual sale price of similar properties that have closed recently (within the last 6 months to a year), and what’s currently on the market.
Step One
Look at what’s recently sold in the same area or building as the property you’re pricing. If a similar house or apartment has sold in the past few months, the price it sold for gives a strong indicator of market value. Streeteasy.com and propertyshark.com are good resources for checking out recent sale prices. If you’re working with a real estate agent, they should also be able to provide you with exact sale prices, days on market, etc., for comparable sales.
Step Two
Look at the current market situation. (Again, streeteasy.com and/or your real estate agent can help here.) What else is on the market right now that’s similar to the property you’re interested in? Be sure to go beyond size and location. If you’re looking at two studio apartments in the same building, for example, and one has a fully renovated kitchen and bath and the other doesn’t, then you have a case for a higher price for the renovated unit. A nicer view is another case for higher pricing. Make sure you can easily and clearly identify the added value.