For Buyers, looking at comps will help them determine the best price to put in an offer for a home. Sellers use comps to determine the best price to put their home on the market. Real estate agents live off of comps and they look at them all day long. If you are interested in entering the market then it is definitely helpful to analyze comps and it will become a crucial part in determining the best price.
Location Is The Highest Priority
When looking at comps the location of the property becomes the starting point. The market is all based upon location. By keeping within a close radius of the property you will have a better understanding of what the property might sell for. Try keeping it within the same neighborhood as this is the most effective approach. Sometimes there just isn’t enough information so it is perfectly fine to expand your search but you will need to establish a boundary such as a certain school districts reach.
Time Is Of The Essence
The best comps to look at are homes that are currently “pending”. This is because a pending home is live data. When a home is pending that means that a buyer and seller have made a deal. This piece of information reflects live results and in our case the price that the property will sell for. There is always negotiating and wiggle room so the property might not actually be sold for what the pending price is, but that gives us the best data we could hope for. Never look at sales that have gone past 6 months because the market is always in a state of flux.
Home Features Matter
Always look for homes that have similar features to the one that you are trying to buy or sell. Compare square footage, lot size, beds and baths. If there was some work done, consider what has been added on, new appliances, new flooring, new painting and so on and so forth. Consider if there is a view, which is something that is highly prized in real estate and certainly adds value to a property. By finding homes that have similar features you will have a better understanding of the price range you should set for buying or selling.
Don’t Overthink It
You will need to find a good local agent to keep you from overthinking the whole process. Let your real estate agent stress the little things. Hopefully your agent is familiar with recent sales and they can help differentiate why one comp would be better than another. A good real estate agent will know the small nuances that will affect the value of the property.
As always, if you need help buying or selling a property Realty Executives Dillon would be happy to guide you through the process, every step of the way.