“How much should I offer for this property?”
“Is this the actual value of the home, or am I paying more?”
The answers to these questions depend on factors such as real estate market trends, location, etc. and with real estate comps, you can get the answers to those questions.
Real Estate Comps 101: All You Need to Know
Real Estate Comparable Sales or Comps
It’s the process of finding the value of a real estate property, considering key factors like historic sales, neighborhood, area among others. In this process, you compare other similar types of houses to the property you’re about to buy or sell, and thus you get the approximate value range of a property. For example, if you have a three-bedroom and two-bathroom house, to determine the right value of the property, you’ll have to look for the same type of houses in your neighborhood and know about the property price, current property value and past sales.
Who Can Use Real Estate Comps?
Property Buyers & Sellers
As a seller, you’ll have to ensure that you’re listing the property according to the market standard. Otherwise, your property will remain unsold and vacant for a long time, which isn’t financially beneficial at all.
To know about the actual market value of a property, you can look for similar types of properties on different listing websites and write down the selling values. Also, while checking the price, look at the houses’ selling points. It’ll help you to showcase your property to the customers and sell it faster.
Again, as a buyer, you need to know about the market price as well, and for this, you can use real estate comps. When you don’t have knowledge about the market value of a property, chances are you’ll be paying more than the actual value. This will eventually affect the equity of the property. That’s why whether you’re a buyer or a seller, you should use real estate comps to know about the actual market value of a real estate property.
Real Estate Agents
Real estate agents also use real estate comps to calculate the accurate market value of a property. After pulling the data, they use it for comparative market analysis and advice their clients.
How to Do Real Estate Comps
Own Research
There is nothing better than doing your own research to find real estate comps. You can use different websites such as Zillow and Realtor to find homes near your neighborhood. However, sometimes real estate comps shown on these websites are not accurate and misleading. Besides, you may not find the property that matches your own property. That’s why it’s better to use the country records to get the actual information about a property.
Hire A Real Estate Agent
If you don’t have time for all the research, you can simply hire a real estate agent and leave it all to them. They will do all the research such as the property size and its value, market trend, property demand, market analysis, etc. and inform you about the accurate value of a property.
