If you see the letters “PST!” in connection with selling a house in Delaware, don’t think it’s someone whispering to get your attention (that would be spelled “psst!”).
The selling-a-house kind of “PST” isn’t something whispered by a black marketeer to keep an off-the-books deal under wraps. There’s no need to speak in hushed tones about PST in polite conversation. When speaking about selling your Delaware house, its meaning is right out there in the open. It may not be on the tip of every homeowner’s tongue as they prepare their home for sale, but its import is undeniable in formulating one of your listing’s most important ingredients: the asking price.
Before any Delaware house can be put on the market, zeroing in on the dollar amount the ultimate buyer will be willing to pay is always a kind of high-stakes guessing game. This mysterious buyer could be anyone. He or she could appear at any time. Even so, picking an asking price that attracts the greatest number of possible ultimate buyers isn’t pure guesswork, nor is it some number that’s plucked out of the air. And it definitely isn’t a large number that’s chosen “just to see what happens.”
The most reliable way to arrive at an effective asking price is to do some serious investigation into the current Delaware market by seeking what previous buyers have been willing to pay. That’s where PST! comes in.
This “PST” is an acronym for Proximity, Similarity, and Timeliness—the three main ingredients that measure the quality of Delaware “comps”—the comparable sales figures that buyers, their agents, lenders, and sellers rely upon to develop asking and offering prices.
P—proximity: how physically close was the sale? Next door is best; in the neighborhood also good; 50 miles away, pretty worthless.
S—similarity: how do the layout and features compare with your house? With a slight adjustment, a 4 bedroom 3 ½ bath comp is useful for your own 4 bedroom 3 bath property. For a 1 bedroom condo, not useful. It’s important to account for level of finish, too. If a neighbor’s home sold for X dollars including its brand new $80,000 kitchen remodel, a similar house that’s straight out of the 80s shouldn’t expect the same.
T—timeliness: how recent was the sale? A March sale would be terrific right now; January 2015, not so terrific.
Researching and analyzing a good sampling of comps accomplishes more than just establishing the asking price. Being able to furnish a solid selection of comps convinces buyers that you are selling your house for a reasonable price. And lenders can use them to verify a property’s collateral value in today’s Delaware marketplace.