Why are comps important in real estate?
House comps are a key component of both buying and selling real estate. They can prevent you from overpaying for a property you’re buying and help you determine a realistic listing and sale price for a home you’re selling.
What does it mean for a realtor to pull comps?
In short, finding comps involves looking for recent sales of houses as much like your own property as possible, then comparing your home to them and adjusting your price to account for the differences.
Are real estate comps accurate?
Buyers can—and should—offer more or less money for the house based on something called real estate comps, short for “comparables.” … Using comps to determine a home’s valuation is not entirely a science, but there are some signs your real estate comps are not accurate.
What is considered a comparable home?
Real estate comps, short for “comparables”, are homes that are located in the same neighborhood and are similar in size, age, condition and features as the property you are trying to buy or sell.
How long are Comps good for?
When an appraiser is looking for comparable properties to determine a price, they are supposed to only look at sales within the last 90 days. Now, if there aren’t enough sales a lender might go back six to 12 months. But the ideal is 90 days.
How do you price comps?
Price per square foot: Real estate agents use price per square foot to identify comparables. Divide the sale price of a home by its square footage, then compare that number to your own desired price per square foot.
How far away can Comps be?
Comps should ideally be within one mile of the subject property, and not over any major barriers like a freeway, a river or railroad tracks. Comps need to be in the same city as the subject property in most cases, even if a comp in another city is less than a block from the subject property.
What do comps tell you?
Comps, an abbreviation of “comparable sales,” are used to determine a home’s fair market value through the sales comparison approach to pricing property. … According to this principle, you can figure out the value of a home by finding out how much it would cost to purchase a similar, equally desirable property.
How accurate are zestimates?
According to Zillow, the nationwide median error rate for the Zestimate for on-market homes is 1.9%, while the Zestimate for off-market homes has a median error rate of 6.9%. … The smaller the range, the more reliable the Zestimate because it means Zillow has more data available on that property.