3 Easy Steps to Find Real Estate Comps for Your Home

38% of home sellers have had to reduce their asking price at least once to attract buyers. Moreover, 58% of buyers believe they have overpaid for the home of their dreams. Not knowing the current market trends costs everyone a pretty penny.

The solution is simple. Check real estate comps. For sellers, they can help set a competitive price. For buyers, they can provide a property’s market value. This prevents them from overpaying.

If you require more guidance, Houzeo’s Gold and Platinum packages provide a detailed Marketing Assessment. This assessment includes your comps and an analysis of your listing price, helping you avoid pricing mistakes.

What Are Comps in Real Estate?

Comps are recently sold properties in the same area that share similar characteristics.

Let’s say you want to sell a house with 2 bedrooms, 1 bathroom, and 1,000 square feet of living space. To price it appropriately, you should look at other houses with the same characteristics.

It’s important to note that no two homes are exactly alike, so comps are just a starting point. Real estate agents can help you identify the most relevant comps and adjust the price according to specific features of your property.

How to Find Comparable Home Sales?

To find homes similar to yours that have been sold, follow these steps:

1. Understand Your Home’s Configurations

Make a list of details like :

• Property Type: Compare similar properties, such as single-family homes with single-family homes and condos with condos.
• Location: Ensure that the comparables match the location of your property or are in a similar neighborhood.
• Size and Features: Verify that the square footage and other features, such as lot size, garage, basement etc., closely resemble your property.
• Condition: Consider the condition of the comparables, including any recent renovations or updates.

2. Search for Similar Homes

Here are some ways to look for similar homes that have been sold in 3 months or less:

• Use real estate websites like Houzeo, Zillow, Trulia, and Realtor.com to search for homes in your neighborhood.
• You can also ask your agent to check active listings on the Multiple Listing Service (MLS).
• Public records are another option. There are many counties in your state with public records websites. This can be a good option if you want to find comparable sales that are not listed on real estate websites.

3. Compare the Comps

Once you have shortlisted 4-6 comparables, compare their sales prices. You can calculate the price per square foot (PPSF).

Divide the sale price of each comp by its square foot. Then multiply the average PPSF of all the comps by the square foot of your home.

Let’s say you found four comps with PPSFs: $200, $215, $235, and $225. They give an average of $218.75.

Multiply it by your home’s size, say 2,000 square feet. This calculation suggests that your home’s value will be approximately $437,500.

Who Uses Real Estate Comps?

Real estate comps are used to determine the fair market value of properties. These are used by many stakeholders involved in the real estate transaction, such as:

Home Sellers

Home sellers use comps to set a realistic asking price for their property. They compare the price of their home with similar homes.

Sellers can also use comps to create marketing material.

Homebuyers

Homebuyers use comps to estimate the fair market value of a property they are interested in. If the property is underpriced, they can question the seller as to whether there is any defect in the property or if there are any legal liens pending.

If a buyer makes a lowball offer, the seller can use comps to demonstrate that their asking price is fair.

Real Estate Agents

Real estate agents use comps to help clients set fair asking prices and negotiate effectively. They also create Comparative Market Analysis (CMA) reports to help determine the fair market value of a property.

Appraisers

To complete a sale transaction, an appraisal is essential. Initiated by the buyer’s lender, this process involves a professional appraiser, who will determine the market value of the house in question.

During a home appraisal, an appraiser relies on real estate comps to accurately determine a property’s value. This can make or break a transaction.

✍️ Analyze the Market Condition: In the current market, where homes are selling quickly and for above asking price, real estate professionals should consider using comps that sold for slightly more than the subject property.

Conclusion

Real estate comps are an important tool for anyone involved in the real estate market. Comps can help you make more informed decisions about your property.

Here are some tips for using real estate comps:

• Get as Many Comparable Properties as Possible: The more comparables you have, the more accurate your analysis will be.
• Consider All the Essentials: Consider all the factors that affect home value, such as property type, location, etc.
• Include Repair and Renovation Costs: If you are buying a property that needs work, be sure to add the estimated cost of repairs to your home’s value.

By following these tips, you can use real estate comps to your advantage and make the best decision about your property.

Frequently Asked Questions

Seller