What’s a Good Comp?

What’s a Good Comp?

“Comps” are Comparable

When pricing your home, or before making an offer on one, you’ll want to make sure the price is right.  To do that, you and your agent will compare it with similar homes that have sold.  Since no two homes are exactly the same, you’ll make adjustments to arrive at the current value. Here’s what matters most . . .

The Ideal Comps:

  • Similar size, model, style, quality of construction and condition.
  • Similar community: proximity to amenities, quality of schools, walk/bike trails, etc.
  • Within a mile of subject property.
  • Sold within the past six monthls.
  • Within 5 years of same age.
  • No more than 20% difference in square footage.

After the Challenging, now the Difficult:

  • Have a reliable formula for adjustments:  know the value of a full bath vs. half, full basement vs. partial basement vs. no basement, bedrooms, one-car garage vs. two, frame construction vs. brick, overall condition including remodelling.
  • Have a formula for market appreciation or depreciation – especially for comps outside the preferred six-month window.
  • Adjust as needed for terms of sale (cash vs. new loan), type of Seller (individual, bank, estate, etc.)

 

 

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