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Price variation among houses that appear to be very similar from the outside usually has something to do with condition and updates. You can certainly request that an appraiser or another agent create a new set of comps to see if they match. These homes, often referred to as “comps” help to establish an appropriate price for homes like yours in the neighborhood. If you plan to go the for-sale-by-owner route, this may be worthwhile, even though it costs roughly $400 to $500. In theory, all that info can be used to decide a good list price for your house. But the reality is that collecting methods might not be perfect.
Also, keep in mind that using comps to determine your home value is not the exact way an appraiser will calculate the home’s value, but this process can be a good way to get an idea of what to expect. Simply put, real estate comparables – or “comps” – are comparable properties in a specific area that you’re looking to buy or sell in. Comps are used to determine the value of a home by comparing it to similar properties sold in the same neighborhood or in an area as close as possible to the house being valued. Knowing how important comparables are, some sellers may try to winnow through the records to come up with them on their own.
How Are List Prices Set?
To find appropriate comps for your home, your first step is to get clear on the property. Make a list of all the details that define it, such as where it’s located, its size, how much land it sits on, the number of bedrooms and bathrooms, amenities and any special finishes or upgrades. We are an independent, advertising-supported comparison service. Listing photos are marketing materials and, as we all know, sometimes can give a misleading impression. You’ll want to verify what you’ve found online to be sure the homes you’ve selected truly are similar to yours.
Similarly, buyers use house comps to help them calculate a fair offer. Comps can prevent a buyer from overpaying for a home by knowing what similar properties in the area have recently sold for. House comps generally include more than one recently sold property to measure your home against.
How to find comps for your home
Note things like cracks in the driveway or missing shingles. The condition of the exterior should give you some insights into the condition of the interior. Look closely at things like appliances, fixtures and flooring.
If this is the case, you may want to consider focusing on an even smaller timeframe. Companies displayed may pay us to be Authorized or when you click a link, call a number or fill a form on our site. Our content is intended to be used for general information purposes only. It is very important to do your own analysis before making any investment based on your own personal circumstances and consult with your own investment, financial, tax and legal advisers. 1Based on Rocket Mortgage data in comparison to public data records.
Home Buyers
Using the information you’ve gathered online and from your visits, select the three comps that are most like your property. Use the middle price, adjusting up or down for differences in size, quality, location, features and upkeep. To find a comp, a Realtor looks at homes in your area comparable to yours that sold recently. So if you have a three-bedroom, the Realtor will probably come back with the three-bedroom one block over that sold last month. She’ll be armed with the sold price, the list price, and other salient facts.
The home should be about the same square footage as your home , with the same number of bedrooms and bathrooms. If you can’t find something close, you can calculate the price per square foot and then multiply the result by the square feet in your home. You can also filter by ZIP code, square footage and other home features.
Savvy real estate agents regularly run comps to keep an eye on their local market and gauge overall trends. Real estate prices are based on several factors, including supply, demand, location, condition, and property features and amenities. Because these values can be relative and ever-changing, comparable properties on the MLS are a respected method for setting fair and competitive list prices.
By comparing similar properties that have sold within the past few months, sellers can identify which features make their listing unique from others. These points can be highlighted in photographs, marketing materials, and in-person at open houses. When looking at comparable home values, there are a few different categories that you can examine. These include home sales, pending sales, current homes for sale in the area, expired listings, and withdrawn properties. The values of each of these different listings can help you gauge what listed values of the similar properties in your area successfully got off the market.
For example, if you have a two-car garage and your neighbor has a one-car garage, your home might sell for more. Previously, he served as an editor and content producer for World Company, Gannett, and Western News & Info, where he also served as news director and director of internet operations. If the home is in a different area, is there any difference in property tax rates? People might pay less for a similarly sized home if taxes are higher. We already mentioned that for accuracy, you should only reference comps from the last few months.
This information also allows them to factor holding costs into their deal analysis more accurately. If you are a real estate investor, you should know how to run comps on the MLS. Knowing how to do so can help you set list prices backed with research and data, giving you the confidence and accuracy needed to sell a property.
So again, using the example above, imagine your comp home sizes are 2,000, 2,060 and 2,180 square feet. Divide that number by the average price above ($416,000) and you get $200 per square foot. Picking the best real estate comps can be a challenge if you’re struggling to find homes for a house that closely compare to yours. You’re lucky if you live in a subdivision where floorpans, style, and finishes are similar.
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