How Do I Pull the Best Comps on a House

Final updated on Oct 26, 2021

It wasn't that long ago that buyers, sellers, and existent estate investors had to depend upon a existent estate agent for comps. Today, dwelling owners and investors can run their own comps using any computer with an internet connexion.

In this article, we'll explicate how homeowners and investors apply comps, what makes some comps better than others, and how to run your own comps.

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Primal takeaways

• Homeowners and investors run comps on contempo sales of homes nearly similar to the home being sold or purchased, which is also known as the subject property.
• Homebuyers and sellers, real estate investors, appraisers, and existent estate agents all use comps to assist determine property value, and offer and request cost.
• Today's technology and online resources allow homeowners and investors to run comps without the help of a real manor agent or the MLS.
• Factors to consider when choosing the all-time comps include the sale appointment, location of the comp, square footage, number of bedrooms and bathrooms, and lot size and shape.

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What are comps?

Comps are records of contempo sales transactions of nearby homes similar to the i an homeowner or investor has. In the real estate industry, a comp home is also known as a "comparable" and the dwelling house the comparable is existence compared to is known as the "subject" property.

For instance, imagine that the subject belongings (the 1 a homeowner or investor is thinking virtually selling or buying) is a one,400 foursquare foot unmarried level, 3-bed/ii-bathroom home with a 2-motorcar garage on a vi,000 square foot lot.

Running comps on recent sales of homes most similar to the subject belongings tin provide a starting point for estimating the property value for both buyers and sellers.

How are comps used?

Homeowners and investors use comps to help ensure that they don't overpay for a holding being purchased, or exit money on the tabular array by underpricing a dwelling house that is being sold. In addition to buyers and sellers, comps are too run by real estate practitioners such every bit appraisers and real estate agents.

Home sellers

For sale by owners (FSBOs) and owners selling off the market place run their own comps to help decide the fair market value and an authentic listing price for the holding.

Comps tin apace change from one week to the adjacent, or sometimes daily if the local real estate market place is hot. Even when an owner is listing the domicile with a real estate agent, running your ain comps is a skillful way to get a second opinion to help make sure the listing price is right.

Home buyers

Owners and investors ownership off the market run comps to make up one's mind a off-white price to pay for the home.

If the local real manor marketplace is a heir-apparent'southward market, which means there are more homes bachelor for sale than in that location are potential buyers, a buyer may make up one's mind to make an initial offer price lower than the comps.

On the other hand, if the market is a seller's marketplace where there are more buyers than available homes, a motivated buyer may decide to make an offer based on the toll the comps suggest to avoid losing the bargain to another domicile buyer or investor.

Appraisers

A real manor appraiser runs comps to verify that the cost of the dwelling house that a buyer and seller agreed to in the purchase and auction agreement is justified by recent sales activeness of like properties.

If the purchase is being financed, a lender will hire an appraiser to run comps and appraise the value of the home. Fifty-fifty when a home is being purchased for cash, some buyers will still hire an appraiser to run comps to double-check the property value.

Existent estate agents

Agents utilize the multiple listing service (MLS) to run comps every bit part of a comparative market analysis, or CMA. Sometimes, a homeowner or investor selling off the market will inquire a real manor agent to run comps to see what the habitation is worth. Fifty-fifty though an off market home isn't listed on the MLS, a seller may all the same agree to pay a committee to a existent estate amanuensis who finds a ready, willing, and able buyer.

Can you run comps without a existent manor agent?

Running comps without a real estate amanuensis is completely doable with the engineering and online resources available today.

In most counties, holding records are public and can be institute on the canton assessors' or tax collectors' websites. Depending on the county, a homeowner or investor running comps may be able to download a CSV data file for a specific neighborhood or area. Then, open the CSV file with a spreadsheet plan like Microsoft Excel, Numbers, or Google Sheets and search for contempo sales comps using fields such equally auction date or neighborhood.

Searching on Zillow or Redfin is another proficient style to run comps without a real estate agent. Later selecting the neighborhood or null code the subject property is located in, homeowners and investors tin can search for recent sales using criteria such every bit home type (such as single-family houses vs. multifamily), number of bedrooms and bathrooms, square feet, lot size, and year built.

The Roofstock Cloudhouse Calculator is some other skillful way to appraise the market value of a home, especially for an investor buying a rental or a homeowner marketing an off-marketplace listing to existent estate investors eager to notice a good rental belongings. Simply enter the address of any single-family home in the U.S. and receive data like to that real estate agents use.

Factors to include as function of your comps

Now allow'south take a closer look at how to run your own comps. At that place are a multifariousness of criteria to consider for finding the best comps for a subject property:

Location

Await for sales comps in the same neighborhood, metropolis block, or area that the subject property is located in. For suburban surface area comps should be no more than ¼ to ½ mile from the field of study belongings. The search area for urban comps may be even less, depending on how dumbo the neighborhood is.

Sale date

In an active real manor market place where there is a high level of buying and selling, comps should be no older than thirty days. If comps similar to the subject property are hard to observe, or if there isn't a lot of activity in the marketplace, an owner may push button the search fourth dimension frame back to the by 3 or 6 months.

Square footage

The best comps are ideally within 10% of the size of the subject home, or with a departure of no more than than 300 square anxiety. For case, if the subject home has 1,800 square anxiety, search for comps that have a size of between i,600 square anxiety and 2,000 square feet.

Bed/baths

Sales comps should accept the same number of bedrooms and bathrooms as the bailiwick belongings. Although a iii-bed/1-bathroom dwelling may seem like a good comp for a iii-bed/ii-bathroom dwelling, an extra bathroom can make a big departure in the dwelling house value.

Lot size

Fifty-fifty in the same subdivision, lot sizes often differ from one home to the side by side. Generally speaking, a bigger lot can add more than value to the dwelling. However, factors such as the shape of the lot (for instance, rectangular vs. triangle) and what is adjacent to the lot (such as backing to a decorated highway) will bear on the value of the comp and the subject property.

Construction date

Homes with a similar age and construction date make the best comps for the home beingness sold. That's considering the mechanical and structural systems similar plumbing, heating and cooling, and the foundation and the roof will usually be in the same condition.

Updating

Sometimes adjustments have to exist made to comps that have been recently updated, such equally a new roof or a spa and gazebo in the backyard. If the comp is amend than the subject property, the value of the comp is adjusted downward to match the discipline property. If the comp is worse than the field of study property, such as not having a new room when the subject property does, the value of the comp is adjusted upward.

Nearby civilities

Features and amenities of comps should exist similar to the subject belongings. For example, having a loftier walk score, being shut (simply not as well shut) to major shopping areas, public transportation, schoolhouse commune, and neighborhood rating can all impact holding value.

Price per foursquare foot

After running comps and making whatever adjustments, carve up the sales price of each comp by the holding'due south foursquare footage to determine the average sales price per foursquare foot. Then, multiply the foursquare footage of the subject property past the sale cost per square foot of the comps.

For example, if the subject field property is 1,400 square feet the comps have an average per square foot sales price of $150, the discipline property should exist worth around $210,000.

Example of running your own comps

Here's a simple example of how to run your ain comps on a single-family rental dwelling house. After selecting iii comparable homes that are most similar to the subject property, a chart is created to list the main characteristics of each habitation:

	Bailiwick	Comp #1	Comp #ii	Comp #3
Toll	TBD	$160,000	$145,000	$150,000
Sale Date	Pre-list	ii weeks	1 calendar month	1 week
Foursquare Footage	1,500	1,600	one,500	1,550
Bedrooms	3	4	3	3
Bathrooms	2.5	3.5	2	ii
Garage	2-car	2-automobile	2-auto	ii-car
Condition	Expert	Worse	Worse	Good
Lot Size (sq ft)	6,000	vii,000	vi,000	five,500

The next step is to make up one's mind how much specific features increase or subtract the value of the comps compared to the subject habitation:

Item	Value
Additional Square Feet	$120
Bedchamber	$6,000
Bath	$three,500
Improve Condition	$5,500
Additional Lot Size (per sq ft)	$1

In one case values are adamant, the nautical chart is revised to account for total adjustments to each comparable, and to adjust the sales price of each comparable. If a comp has a superior feature the value is deducted from the comp, and if the comparable has an inferior feature value is added to the comp:

	Subject	Comp #one	Comp #two	Comp #iii
Price		$160,000	$145,000	$150,000
Sale Appointment		2 weeks	one month	i week
		-$12,000		-$vi,000
Square Footage	1,500	1,600	i,500	1,550
		-$6,000
Bedrooms	3	four	three	3
		-$three,500	+$1,750	+$1,750
Bathrooms	2.5	3.5	2	2
Garage	2-automobile	2-car	ii-machine	2-car
Condition	Good	Worse	Worse	Adept
		+$5,500	+$five,500
Lot Size (sq ft)	half-dozen,000	vii,000	6,000	5,500
		-$1,000		+$500
Total Adjustment		-$17,000	+$seven,250	-$3,750
Adjustment Toll		$143,000	$152,500	$146,250

Based on the adjusted sales prices of the comps, the subject field property should have a fair market value between $143,000 and $152,500.

However, Comp #2 has fewer adjustments and Comp #3 has the near contempo sale date. By giving these last two comps more weighting, a more accurate valuation of the subject holding could exist in the $146,250 and $152,250  cost range at the time the sales comparing approach was done.

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Source: https://learn.roofstock.com/blog/running-comps