How to know if you're overpaying: reading comps like an agent

The list price is the seller's opinion. What a home is worth is what similar homes actually sold for.

When you look at comparable sales, check:

• Sold, not listed: only closed sales count.
• Recent: ideally the last three to six months.
• Close by: same neighborhood, and ideally the same side of any busy street or school boundary.
• Similar: bedrooms, baths, square footage, lot size and condition.
• Days on market: homes that sat for months often sold below list.

Then adjust. A comp with a renovated kitchen is worth more than yours if yours is original. A comp on a busier street is worth less.

If the asking price sits well above the adjusted comps, you have room to negotiate. If it's in line and the home is drawing multiple offers, the market is telling you the price is fair.

Ask your agent to pull the comps and walk you through the adjustments. You should never have to guess.