Lauren Nowacki5-minute read
UPDATED: July 25, 2023
It can be hard to put a price on a home you love – whether you’re the one selling it or buying it. While your emotions may tell you one thing, the condition of your home, the state of the market and the amount others are willing to pay for the property may say something else.
It doesn’t have to be a guessing game. When deciding how much to ask for a home you’re selling or offer on a home you’re seeking, real estate comps can help provide an accurate answer.
Real estate comparables, or comps, are similar homes that have recently sold in a specific area, and they help determine the fair market value of a house. Comps are typically used when someone is buying or selling a property and wants to make sure they offer or ask the right sale price. Real estate comps should be recently sold homes in the same area, and they should be as similar as possible to the property in question. Similarities should include size, age, number of rooms and condition.
Real estate comps are helpful for professionals and everyday people who may be purchasing or selling a home – or are just curious about local home values. Here’s how various groups of people may use house comps:
Home buyers and sellers can look for home comps in several ways. Working with a local real estate agent to analyze the MLS is one of the easiest ways to get your hands on comps. But if you aren’t ready to work with an agent just yet, you can also do research by diving into public records or looking online, especially on reputable real estate websites.
When conducting your analysis, you’ll want to review and compare at least three properties that are the same or similar in the following ways:
Whether you’re a home buyer, seller or curious homeowner, follow these tips for finding the best real estate comps when you’re ready to determine the value of a home.
While active listings can give you an idea of other asking prices, it’s important to look at sold property listings when reviewing comps. That’s because the listing price isn’t the final price on houses that are for sale or pending sale.
Several factors may influence the sold price. For example, the home might’ve appraised for lower than the listing price, or something may have been found during the inspection that caused the seller to lower the price. On the other hand, a bidding war may have driven the price of the home up by thousands of dollars.
If possible, check out the property in person when evaluating whether the house is a good comparable. You can see a lot that the listing may leave out, including cracks in the driveway, an outdated roof, missing shingles or siding, a crumbling porch or a poorly maintained yard.
You’ll also get a better idea of the neighborhood. As you drive around, make note of how other homes and yards are maintained, if kids are playing outside, if it’s noisy or quiet, and if certain amenities are nearby.
There are a few ways to find comps. You could look through public property records – online or at the courthouse – or browse recently sold homes on various listing sites. You could also use the Rocket Homes℠ property report, which not only shows similar recently sold homes in the area but also tells you the average time on the market and housing market conditions – including how many homes are for sale in your area.
You don’t have to go it alone, either. Consult with a real estate agent or industry professional who can help you find comps, translate terms and answer questions, walk you through the information and show you how to compare the homes.
Real estate comps are helpful for home buyers, sellers and other real estate professionals. Whether you’re buying or selling a home, it’s best to consult with a real estate agent to determine the right price for a home – in addition to the other steps to take during the buying or selling process.
Are you thinking about buying a home? Before you make an offer on a home, make sure you know how much you qualify for. Get started with Rocket Mortgage®.
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