Do you know how much a property is worth? The best way to do this is to get comps, or in other words, get comparable sales information for your real estate market so you can accurately calculate the value of a home. If you get comps for your local area, a comparative market analysis gives you the chance to see how much similar homes in the area sold for.
Why is it Important to Get Comps?
Valuing a house can be a delicate balance. Overprice a home and it could sit on the market forever, value it too low and you could miss out on thousands of dollars in value, essentially leaving cash on the table. If you get comparable sales information, you can define a home’s place in the market and get the balance just right – maximizing value and selling a house quickly.
How Do I Get Comps?
In the data-rich world of the internet, getting comparable sales information is much simpler than it used to be. By carrying out some simple research, you can create a comparative market analysis for any type of home in any area of the United States.
An appraiser or a real estate agent will typically access the MLS (multi-listing service) to get comps for a home in your area. A simple way to get comps is to just ask your agent if you can get comparable sales information.
Creating a comparable market analysis is about finding homes which are similar in size and in the same location as yours. Get comps which are as similar to your home as possible. This way you can see how much people are paying for your type of home in your area. When you get comps for a house, remember to look for recent sales. The market moves quickly – old data is old hat – get comps for similar properties which have sold within the last 6 months.
DIY: Get Comps Yourself
If you are looking to do your own comparative market analysis, you can get comps from online resources. Propelio is an online resource that lets you get comps for a number of markets. Never rely on the biased opinions of others. When it’s time to purchase a property, never leave the details for someone else to determine. A seller says it’s worth X, a real estate agent believes Y, and the wholesaler claims Z; and the only opinion that matters is yours.
How to Value a House Once You Get Comps
Every home is different, and while it is relatively simple to get comparable sales information, the data you gather will never be considered 100% accurate. No two houses are the same, and so, a certain amount of common sense must be applied when making a comparative market analysis. Is a home more, or less, desirable than the comparable data you have gathered? While the number of bedrooms, square footage, and location can often be accurate, the small details like a swimming pool, a two-car garage, a large yard, noise from nearby roads, and curb-side appeal can mean you must tweak the valuation of a house accordingly.
Set up a Propelio demo today, and we’ll show you how quick and easy it is to get comps.
Image courtesy: Flickr and Jonathan Kos-Read