Real estate comps, short for comparables, refers to the concept of finding similar properties to the one being bought or sold. There are various purposes to finding comps from setting the right listing price to making an offer on a home. Whether you’re buying or selling, real estate comps give you the information you need to make an informed decision.
Here’s what you need to know about real estate comps to make the buying or selling of your next home a success.
How Real Estate Comps Help Buyers
If you’re in the market for a home in a specific area, real estate comps give you an idea of what you can expect in terms of pricing for the size and type of home you’re looking for. For example, if you’re looking for a 4 bedroom, 3 bath, 2,000 square foot home on a half acre lot in a certain neighborhood, you’ll need to find other homes of the same number of bedrooms, bathrooms, square footage, and on the same lot size to compare prices with. Other factors must be similar as well, such as the age and condition of the home. With this information, you’ll have a better idea whether an asking price is fair or not.
How Real Estate Comps Help Sellers
When you’re ready to put your home on the market, one of the most important parts of the process is setting the listing price. Real estate comps are extremely helpful in determining an appropriate listing price to ensure your home will sell. You’ll want to find other homes in the same area that match your home in terms of square footage, number of bedrooms and bathrooms, lot size, age, and condition. The more similar the comp home is to yours, the more accurate your pricing will be.
Appraisers Use Real Estate Comps
Another important use of real estate comps is during appraisals. Before a home is bought or sold, an appraiser will evaluate the home and assign a value to it. Appraisers use real estate comps to help determine home values. If the appraisal is not comparable to the listing price of the home, it may fail to sell or sit on the market for a longer period of time. This is why it is important that sellers have access to real estate comps, especially if appraisers and buyers do.
How to Access Real Estate Comps
Now that you understand the importance of real estate comps, how do you get this information? This is just one of the many reasons it is beneficial to work with a real estate agent when buying or selling a home. Real estate agents have access to the MLS (multiple listing service), which are private listing sites that are maintained and paid for by real estate professionals. MLS listings are the easiest way to access real estate comps, as the information is calculated based on the most up to date sales information. Real estate agents have exclusive access to the MLS.
What Criteria Factor Into Real Estate Comps?
The value of real estate is determined by many different criteria and factors, such as:
- Location. The location of a property may be the single most determinant factor in the price. As you may know, a 500 square foot apartment in New York City may cost more than a 5,000 square foot home in the country.
- Number of rooms. The number of bedrooms in a home is one of the biggest factors in the listing price. The difference between a 3 bedroom home and a 4 bedroom home could be $100,000 or more.
- Condition. The condition of a home will make a difference in the listing price. If a home needs extensive repairs, it may sell for much less than other homes of the same size.
- Age. The age of a home can be a fickle factor in the value. A newer home may be preferable to some buyers, yet other buyers may be of the philosophy that “they don’t build them like they used to.” A historical home could be worth more than a brand new home.
- Square footage. The total square footage of the home will be a big factor in the listing price. There is sometimes a distinction between “heated square footage” and total square footage, so be sure to read the fine print.
- Lot size. How much land a home sits on will be a major factor in the listing price. The more land, the higher the value of the property.
- Time frame. When the comp homes were bought and sold plays a big part. The real estate market fluctuates based on the economy and the season. The same home may sell for more in the spring than it would during the winter, and may sell for more this year than it would have last year.
Get Exclusive Access to Real Estate Comps in Tyler from the Pamela Walters Group
Are you planning to buy or sell a home? You need a Tyler REALTOR® who has access to the most current real estate comps in the area. The Pamela Walters Group uses a combination of real estate comps and experience to help you list your home for the right price, or help you put the right offer on the home you want. We help sellers get the best offers on their homes and buyers get the homes they want for the right price.
Call (903) 962-0034 or contact us today to get started. We look forward to helping you with all of your real estate needs.