Real estate comps are vital tools to help assess how buyers will perceive your home’s value. Finding good comps can allow you to be prepared to sell your home, or will simply help you stay informed about what upgrades you should make in the future to compete with other homes in your area. Here’s everything you should know about identifying real estate comps.
What’s a Comp?
A real estate comp is a home and property that is comparable in features and location to the one you are trying to buy or sell. The best “comps” are homes that are in the same or similar neighborhoods with similar demographics, have nearly the same square footage, and have the same number of rooms. Appraisers and real estate agents alike rely on real estate comps to help place an estimated value on your home.
Look at Known Real Estate Websites Estimates
Searching reliable real estate websites for homes sold within the last three to six months in your area can give you a local bird’s eye view of home values. Keep in mind that the closer a home is to yours, the better when you’re assessing comparable properties. School districts, noise pollution, views, and other external factors can all play a part in buyer interest when it comes to homes, so location is key when checking estimates. Many real estate sites offer a home value estimate based on data from identified comps, but these algorithms can be unreliable since local real estate experts know the true ins and outs of coveted locations within a specific city.
Ask Your Real Estate Agent for a CMA
Real estate agents and brokers have access to the MLS and are trained to identify comps accurately. They also have direct knowledge of the area, so they’ll know if a property is likely more appealing to buyers due to its location within the city. If you’re ready to sell, your real estate agent can provide a comparative market analysis (or CMA) to help you find out what price you should list for.
Do a Drive-By Review
Occasionally, an appraisal or a CMA will come in lower than you expect. This can happen if there are few comps in your area. If you feel that your home is being undervalued, be sure to do a drive-by review of the comps that were listed. This can help you assess what features might make your home better (and worth more to a buyer). Knowing this can even help you dispute a low appraisal if the need should ever arise.
