Using Comparable Sales in the Buying Process

Table of Content

• Can I find house comps in my area without the MLS?
• What info do you use to get the data?
• Best Banks for Small Businesses & Real Estate Investors
• Can you get comps from MLS without a Realtor?
• Real Estate Comps: How to Find Comparables for Real Estate
• Want to know what your home might sell for?  Our free comparable sales report is a great place to start.

When a homeowner updates a bathroom or renovates a kitchen, their home value typically increases. Consider any renovations or upgrades you see in your real estate comps and how those compare to your home’s features. Does your home have a new kitchen or a deck that needs fixing? Either of these will undoubtedly have an impact on your home’s value. A home’s value typically increases when there are more bedrooms and bathrooms. This translates into a higher sales price and considering higher comps.

Sometimes they may look back a year and make adjustments if there aren’t good comparable sales to evaluate. Appraisers usually focus on homes within 1 mile if possible, whereas a Realtor may have a narrower scope. Appraisers often focus on homes within 10% of the age and size of the property in question. Like Realtors, appraisers also take into account similar upgrades between the properties. The appraiser then submits a lengthy report providing an opinion of the home’s value. Realtors start by researching comparable home sales to assess the price for the new listing.

Can I find house comps in my area without the MLS?

Comparable sales, or "comps," offer a way to get a sense of a home's value compared to similar homes in the market. If you would like to see this demonstration on the importance of comparable sales, just drop me a note and we will get you in a soon as you are ready. At least one settled comparable sale from outside the subject condo project, subdivision, or PUD.

While it may feel like sales prices are just being thrown around, but there’s actually a method to pricing homes. If a real estate agent presents you with comps for your house all over the map in terms of style, the value provided will probably be inaccurate. Many areas compute lot size based on actual square footage divided into 43,560 square feet . Comparable sales and listings comprise the field of properties that buyers will use to determine the relative value of your home. If you get nothing else from this short article, I hope you take away the concept that value is relative. In this scenario, it is acceptable for the appraiser to verify the transaction of the comparable sale by viewing a copy of the settlement statement from the builder’s file.

What info do you use to get the data?

After all, if one home has 1000 square feet and another 2000 square feet, you are buying a larger home, and it should cost more to purchase. Square footage will raise or lower the value of the real estate comps you’re looking at. The best comps for you will be properties that are comparable to yours. Most counties allow you to search property records online at no cost – although you may need to pay for printed documentation.

Savvy real estate agents regularly run comps to keep an eye on their local market and gauge overall trends. When buyers finance their purchase, most lenders require that the property appraise at or higher than the purchase price. Similar to a real estate agent, licensed appraisers also look at comparable home sales, this time to determine value or worth instead of a recommended sales price. When it comes to the residential real estate market, buyers and sellers should always consider comparable sales. Known throughout the real estate industry as "comps," comparable sales are the sales prices of similar homes. Real Estate agents will put all the comparables together in a report that should be easy to understand even for a layman.

Best Banks for Small Businesses & Real Estate Investors

It can help you make an informed decision about buying or selling a property. Many real estate agents and brokers have software they use to generate comprehensive CMA reports. If you’re creating your own report, it would be best to use a spreadsheet to keep track of your research. A CMA also provides the most accurate data and details about the home and surrounding area.

When you're buying a home, it's a good idea to have your agent show you at least 10 comparable sales on the market. That way, when you're touring homes, you're comparing homes for sale throughout the entire market, so comps provide the best way to get a feel for availability, prices, and the area. Rural properties often have large lot sizes, and rural locations can be relatively undeveloped. Therefore, there may be a shortage of recent truly comparable sales in the immediate vicinity of a subject property that is in a rural location. Comparable sales located a considerable distance from the subject property can be used if they represent the best indicator of value for the subject property.

Can you get comps from MLS without a Realtor?

A comp, which is an abbreviation for comparable sale, is a recently sold home in your area that’s similar to your home in location, size, condition and features. Ideally, you want to compare homes very close in square footage to the property you're looking at. Ideally, you'd want to consider home sales statistics within a certain radius, typically one-quarter to one-half mile of the subject property. The best homes for comparative purposes are within the same neighborhood—but this isn't always the case. This concept is so important that we actually have created a demonstration that is available at our office, and it shows how comparable sales will guide you to the absolute best asking price for your home.

If you are having difficulty or aren’t confident with your price, you can always hire an appraiser. While this could cost you somewhere around $500, it will be worth it if it helps you avoid selling your home undervalue. It’s updated regularly based on market conditions and can show you the longer price trends in your area. Many will provide potential clients with a free CMA in hopes of landing your business. It gives a rough idea of what your home might sell for in today’s market, in your neighborhood. Buyers reference comparables to decide how much to offer on a home.

Birmingham, AL. Although they are the same house, just listed for sale in different geographical areas, the value of each home is largely influenced by individual housing market conditions. While an appraisal waiver can be a powerful tool when competing in a multiple offer situation, the buyer has to have the money to make up the difference. Unfortunately, some agents and lenders haven’t prepared their clients for this possibility, leaving many buyers in a difficult position.

If you want to see more insights into the Austin real estate market, check out these reads. Paul leverages his 25 years of experience in the Austin market to provide individuals with an unparalleled level of personal attention and responsive ... The technical storage or access that is used exclusively for anonymous statistical purposes. If you’re unable to find great comps, don’t just guess at the best price.

With such fierce competition for homes, many buyers are writing an appraisal waiver into their contracts. The waiver means that the buyer must provide their own cash, not loaned money, to make up the gap between whatever the home appraised for and the contracted purchase price. For example, if a home is under contract for $1M, but it only appraises for $900,000, the buyer would be responsible for bridging the $100,000 gap between the purchase price and appraised value. According to Max Leaman, owner of LoanPeople, around 20% of Austin’s loans are not appraising. Amenities– The amenities a home offers can impact the recommend sales price too. One of the biggest differentiators in this market is whether the home has a swimming pool.

A home’s floorplan plays a significant role in determining comps as well. Ideally comps should have the same number of bedrooms and bathrooms as the property in question. For example, a home with a zero lot line is not a good comparison for a home on a 1/3 of an acre. As buyers and sellers navigate Austin’s 2021 real estate market, we are getting regular questions about how home prices are determined and why the purchase price so often doesn’t align with the asking price. Home descriptions that are well-written help sell a home and assist real estate agents and appraisers when putting together their comparable properties. Zillow is the most visited site on the internet for real estate searches.