Real estate transactions are all about location, condition, and price. Real estate comps or comparables also entail these three factors. They play a critical role in determining the fair market value of a property.
As a seller, looking at comps can give you insights on how to present your home the best way and how to price it to sell. It can ensure you don’t overprice your home or leave money on the table.
As a buyer, analyzing comps can help you find out whether a home you’re interested in is competitively priced and what price to offer. It can help you spot a bargain and ensure you don’t overpay. Here is a guide to finding the best real estate comps to use.
In real estate comps stands for comparable sales. Property comps are recently sold properties that are similar in size, condition, and amenities and located in the same area as the home being bought, sold or valued.
Here are the criteria to follow when determining the best comps to use:
Recently Sold: In order for comps to accurately reflect the current status of the market, they should have sold recently. Sales that closed in the last few days are ideal. Generally, pick comparable properties that sold within the last three months so as to avoid basing your decisions on outdated data.
Similar Characteristics: It is important to base your decisions on comparables that have similar attributes to the subject property. For example, a similar number of rooms, square footage, age, and amenities.
Same Area: Comparables should share the same neighborhood and school district with the subject property. If your next door neighbor with a house that is identical to yours just sold their house, that would be the perfect comp to analyze. As a guide, pick comps that are within a 1-mile radius of the subject property.
Thanks to the internet and websites such as Zillow, Trulia, Redfin, and Realtor.com, finding recently sold properties is easy.
Just visit these websites, search for “just sold” or “recent sales”. Filter the results by city to find recent sales in the neighborhood of interest.
Fine-tune the results by filtering by the number of bedrooms, square footage, etc. Pick about ten homes that are most similar to the subject property.
To verify that the comps you selected are indeed similar to your subject home, it is a good idea to visit the houses in person. You can cruise the neighborhood or even use Google Street View.
By doing this, you will learn more about other features that influence the value and price of a home such as curb appeal, upkeep, the surroundings, proximity to public transportation and prized social amenities among others.
Based on the information you’ve gathered online and during your physical visit, narrow down your choices to three to six comps that are most like the subject property as possible.
Use the median price as a starting point and adjust the price up or down by taking into account differences in size, quality, location, features, and upkeep.
Whether you’re on the market for a new home, preparing yours for sale or just trying to gauge the value of your property, analyzing real estate comps will give you a lot of insights.
Thanks to the internet, it is now easy to locate comps in your area and learn about their features and pricing. If you’ve chosen a top real estate agent, they will be able to help you choose the very best comparables and analyze them effectively.
Need to sell a house in the NYC area fast or as is? Master Realty Solutions Buys Houses in All Conditions in Long Island, Brooklyn, Bronx, and Queens. Want to learn more about the cash home buying process? Please give me a call at 718-993-3303 or email info@MasterRealtySolutions.com