Comps, or comparable sales, give insight to the local housing market.
Comps are one of the many factors used to determine the value of a home.
You should consider location, size, and unique features when searching for comps.
If you’re buying or selling a home, you’re likely trying to answer seemingly never-ending questions about home value. How much should you pay for a home in your desired neighborhood? What should you set as your home’s asking price?
Don’t panic: This is where house comps come into play. This real estate tool can help you determine home value by comparing the property in question with similar nearby homes. Let’s take a look at how you can use house comps to buy and sell your home.
What Are House Comps?
The term comps is short for comparable sales, and in real estate, it refers to homes with similar sizes and features in a specific area that have recently sold or are in the process of being sold. Buyer and sellers can use comps to compare homes to other recent real estate sales, which can be helpful for setting your asking price or putting in a competitive offer.
How to Find Neighborhood Comps
There are several ways to find house comps in your neighborhood. The easiest way to find comps on your own is by researching online. Start by searching on real estate listing websites or county record websites to find homes in your area that are pending or recently sold. You can look through photos and descriptions to get an idea of the home’s features and recent updates, but keep in mind that the pricing information may not be recent or accurate.
The best option is to hire a local real estate agent to help you pinpoint the most updated and accurate comps. Real estate agents and home appraisers can access the MLS, or multiple listing service, to pull the most up-to-date comps for you. The MLS is not available to the general public and can only be accessed by licensed real estate agents and appraisers.
How to Use Comp Houses to Boost Your Home Value
Comps are used by various people, from buyers to real estate agents to sellers to appraisers. If you’re looking to sell your home, you should add “researching real estate comps” to your pre-selling checklist to discover how your home compares to similar homes recently sold in the area.
By analyzing comp houses, you can use the results of your house comp research to identify ways to improve your home to help it sell faster and for a higher price. For example, if the recent sales in your neighborhood include finished basements, you should consider completing a basement finishing project to increase your home’s value. When looking through real estate coms, keep an eye out for home improvement projects that boost resale value, such as installing sliding glass doors off of the kitchen or swapping laminate countertops for granite.
What to Look for In Comp Houses
When reviewing neighborhood comps, there are a few things to keep in mind to find the best comparison properties.
You can scour the city or even the state for homes that look like yours, but different locations have different perks that can influence buyers. It’s best to stay local and use comp houses in your own or desired neighborhood rather than across town or farther.
When looking at homes that are still for sale, keep in mind that the listing price is not the final sale price. Likewise, if you look at homes that sold several months or years ago, the comps won’t be a reliable indicator of current market trends and rates. Instead, look at homes that are either pending or that sold within the past six months.
While you can consider square footage to find houses of a similar size, it’s a better plan to look for comps that have the same number of stories or bedrooms. For example, if you own a two-story, two-bedroom home, look for comp houses that have similar stats. You should also consider the number of bathrooms and size of the entire property.
What kind of special features does your home offer that makes it unique? One of the most important things to look for in comp houses is what these homes have to offer that makes them stand out among the pack. If you live in a hot climate and the comp homes in your area feature an outdoor kitchen and patio, you might need to consider taking on that home improvement project to help your home sell well.