The Process Of Finding Comparables For Your Home

What Are Comps In Real Estate?

Comp is an abbreviation of comparable sales. It is a home that has been sold in the same area as yours in terms of location, size, condition, and features.

How Sellers Use Real Estate Brokers

Comps are used by sellers, particularly those who sell their homes for sale by owner (FSBO), to determine the best listing price. Therefore, you will need to familiarize yourself with comps if you are selling your home without the assistance of a real agent.

How Buyers Use Real Estate Comps

Buyers refer to comparables when deciding how much they want to offer for a house. They want to ensure they aren't paying too much for the house they're purchasing.

How Appraisers Use Real Estate Comps

An appraiser will visit your home and collect their comps to accurately value your home. There are two reasons why an appraiser might need to visit your home. First, appraisals are required by lenders before a buyer can close. Second, sellers may also need an appraisal to determine the value of their property.

How Real Estate Agents Use MLS Comps

To create a comparative marketplace analysis (CMA), real estate agents use comps from local multiple listing services (MLS). It is a compilation of comparable comps from the local multiple listing service (MLS) that are used to assist an agent or seller in deciding on a fair listing price. Real estate agents who are savvy use comps to monitor the market and gauge trends.

How To Find Real Estate Brokers

Sellers have two choices when it comes to finding comps. They can either hire an agent to help them with the pricing and research process, or they can search for comps themselves. This is how it works for both.

Real Estate Agents And MLS Professionals

Because the information is more accurate, the local MLS is often the best source for comparable home sales. A professional real estate agent will be able to navigate the MLS and find appropriate comps for your property. They are familiar with the area and can interpret comps using an eye for trends, price per square foot, appreciation of home value, and other factors.

In the hopes of landing your business, many agents will offer a free CMA to potential clients. This gives you an idea of the potential selling price for your home in today's market in your area.

What If I Don't Have The MLS And Want To Find Comps For Houses In My Area?

Public Property Records:
 

The county will usually keep records of the sale price for a particular comparable if you need them. You can search the county records online in some counties, while you might need to visit the courthouse in other counties. It is important to remember that seller concessions are not shown in county records. For example, if a seller lowers the price to cover some repairs, you will see the final price and not the asking price.

What To Consider When Finding Real Estate Comps:

You should try to find at most three homes similar that meet these criteria:
 

• Localization:

  Limit your search radius to one quarter to one-half mile from your home
   

• The Time Frame Includes:

  Only homes that were sold in the last three to six months -- or less if your market is rapidly changing.
   

• Size:

  Keep your home to 300 square feet.
   

• Bedrooms/Bathrooms Include:

  Homes that have the same number and type of bedrooms as yours.
   

• Home Condition:

  Take into account things such as recent renovations, updated interiors, or obsolete features.
   

• The Age Of Your Home:

  Homes built at the same time as yours are the best because major systems such as plumbing and HVAC should be in the same condition.
   

• Nearby Attractions:

  You can find homes that are close to yours in terms of walkability, shopping/retail proximity, waterfront proximity, views, and access to public transportation.
   

• Price Per Square Foot:

  To find comparables, real estate agents use the price per square foot. Divide the home's sale price by its square footage and then compare it to your desired price per square foot.

Tips When Looking For The Best Real Estate Comps:

There are no housing comps that are identical to each other unless you live in a subdivision with similar layouts, finishes, and materials. Even if homes are similar, there is no perfect comp.
 

How do you find the best comps for your business? First, be as objective as possible. Focus on the facts and forget about your emotional attachment to your home.
 

• Only Sold Homes:

  Don't ignore homes currently on the market or pending. Why? Sellers may overprice the property and settle for a lower price. Sellers can set a lower price than the market in order to get multiple offers. You won't be able to determine the value of your home until it is sold. It's only worth what someone pays.
   

• Pay Close Attention To The Type And Style Of Your Home:

  Single-family homes are not comparable to condos and townhouses. When pricing condos to sell, don't compare them to other condos.
   

• Take A Close Look At The Photos:

  Take the time to carefully review the photos in the listing. Are the finishes in the home similar to yours. Pay attention to things such as appliances, fixtures, and flooring. Even small differences (such as stainless steel appliances versus white older appliances) can add up.
   

• Please Read The Listing Description:

  You should also look at the listing description. You may not see every improvement or upgrade in the photos. For example, a recently sold house could have a new roof, which would increase its value. Listing photos won't tell you.
   

• It Is Possible To See It In Person:

  To get a better idea of the condition of the exterior, you can drive by it or walk past it. You should look out for cracks or missing shingles. You should be able to see the condition of the exterior.
   

• Take A Look Around:

  You need to be able to understand the details of where a house is located. For example, is it located on a quiet street or a cul de sac? Is it located in a good school district? Is it close to a train or bus line?
   

• Note Everything:

  Take careful notes when researching comps. Photos sometimes disappear, or listing descriptions are changed after homes sell. The only information you will have is the address, size, and price. This is not enough information to create a comp. As soon as you spot a promising comp, capture as much information as possible.
   

• Forming Your Price:

  It is important to take into consideration multiple data points from different sources when deciding on a listing price.
   

• Hire An Appraiser:

  Are you unsure if the listing price is correct? A professional appraiser can give you an objective appraisal of the value of your home. It costs between $400 and $500, which is a good price for an accurate listing price. This is especially true if you live in a highly competitive market or have made numerous renovations that you aren't sure about their impact on your home's price.
   

• Do Not Take Shortcuts:

  If your comp is twice the size of your home, you can't double the price. Home pricing is complex. Don't let your mind be led by guesswork or poorly matched comps.
   

• Seasonality Should Be Taken Into Consideration:

  As we mentioned, comps should be referred to only from the past few months for accuracy. Seasonality is another reason why this is important.
   

  Whether prices vary dramatically by season depends on your local real estate market, but in general, homes sell more quickly in spring and early summer, and they take longer to sell in the winter. As a result, sellers will often attempt to motivate buyers during slower seasons by offering a lower price.