Top 5 Ways To Get Comps On Property In Your Area

When it comes to real estate, the significance of possessing precise, up-to-date information can’t be overstated. Whether you’re on the verge of selling, poised to buy, or eyeing an investment opportunity, the foundation of your decision-making process rests on solid, actionable data. Among the most pivotal pieces of data are property comps, or comparable sales data. These are not just numbers on a page; they are the key to unlocking the true value of real estate assets. Below, we’ll detail the Top 5 Ways to Get Comps on Property in Your Area.

 

What Are Real Estate Comps?

Real estate comps are comparable properties in a specific area that you are looking to buy or sell in. Comps can be used to determine the value of a potential investment property by comparing it to other homes in your area with similar features, such as size, age, condition, etc.

If you’re looking to sell your property or if you’re in the market to buy, comps can help you find out exactly what you should be paying or spending on a house. Say you have a four bedroom, three bathroom home on an acre of land that you are looking to list. Finding homes in the area with similar features is a great place to start when estimating the value of the property like this.

Conversely, if you are looking to buy a three bed, three bathroom home that was built less than ten years ago, searching for similar properties in the area can help ensure that you don’t overpay.

Why Are Real Estate Comps Important?

The utility of comps extends across the spectrum of real estate activities. 

• For Sellers: Comps are the compass that guides sellers to price their property competitively. Setting the right price from the outset not only enhances the likelihood of a sale but can also expedite the process and potentially increase the final sale price by attracting more interested buyers.
• For Buyers: In the hands of a buyer, comps serve as a negotiation tool and a check against overpaying. They provide a benchmark for what is fair and reasonable, giving buyers the confidence to make offers that are competitive yet reflective of the property’s true worth.
• For Investors: Investors rely on comps to identify opportunities that align with their investment criteria. By understanding market values, investors can spot underpriced properties, forecast potential appreciation, and strategize exits for maximum returns.

What Goes into Real Estate Comps?

Now that we’ve established what real estate comps are and what they’re used for… you’re probably wondering, “What factors go into evaluating real estate comps?”

Location

Location is a huge factor to consider when thinking about buying or selling a property. Often, it serves as the number one reason that someone might move into a new home. If you are beginning a new job in a new area, location will obviously play a huge factor in what property you decide to buy or rent. A 900-square-foot apartment in the middle of a large city may cost three times as much as a 2,000-square-foot home in a more rural area simply because of location. 

Age

The age of a home can play a significant part in evaluating its value. Typically, new homes will have higher value and do not require as much maintenance and upkeep as an older home. If two properties are similar in location, size, and layout, age can act as the determining factor for which is valued more. 

Condition

A property’s condition is another critical point to consider when comparing its value to other properties in the area. 

For example, if one home has mold growing underneath the home in the crawlspace, and another has a completely encapsulated, moisture-free crawlspace, one’s value will be significantly higher than the others. 

Sometimes, age and condition go hand-in-hand with homes and are directly correlated, however, that’s not always the case. So, be sure to take the property’s condition into account when evaluating real estate comps.

Size (Square footage and lot size)

Square footage and lot size has a major impact on a property’s value. A home with an additional 500 square feet in comparison to another that may look similar, can account for tens, if not hundreds of thousands of dollars in value. 

Similarly, two comparable properties may have the exact same 2,000 square feet of space, but if one is sitting on 12 acres of land while the other is sitting on three acres, the property with the larger lot size is going to be worth much more. 

Location also comes into play when factoring in lot size, because five acres of land in a busy, urban population may be worth far more than five acres in a rural setting. 

Timeframe

When searching for real estate comps, try looking for comparable properties that have been sold within the last three to six months. Because the market can change so quickly, it’s important to look at the value of homes that have been sold recently. 

A comparable property with the same square footage, number of bedrooms, and lot size could be used, but if it was sold two years ago, it’s likely the value has changed since then.

Renovations

Renovating and upgrading your home is a great way to increase your property’s value. When running real estate comps, be sure to look for properties with similar renovations and finishes throughout. 

Interpreting Real Estate Comps: The Art of Analysis

Understanding property comps requires more than just a superficial glance at sold properties. The true value lies in a deep dive into the details and subtleties that can significantly influence a property’s market value. 

This nuanced analysis involves a keen eye for details that are not immediately apparent, requiring adjustments and considerations to ensure a fair and accurate comparison.

The Nuances Impacting Property Value

• Recent Renovations and Improvements: A property that has undergone recent updates or major renovations typically has a higher value than similar properties that haven’t. When comparing comps, it’s essential to adjust for these improvements, which might include modernized kitchens, updated bathrooms, or expanded living spaces.
• Added Amenities: Features such as swimming pools, landscaped gardens, solar panels, or smart home technologies can also elevate a property’s appeal and value. Comparing a basic home to one with these added amenities without adjustments could skew the analysis.
• Changing Neighborhood Dynamics: The value of a property is also influenced by its surroundings. A neighborhood undergoing revitalization, with new commercial developments, schools, or public parks, can enhance property values over time. Conversely, areas experiencing a downturn, perhaps due to increased crime or declining infrastructure, may see property values stagnate or decrease.

Crafting a Competitive Edge Through Comps

To leverage comps most effectively, real estate stakeholders must adopt a comprehensive approach that includes:

• Analyzing Market Trends Over Time: By examining how property values have shifted in response to market forces, stakeholders can predict future trends. This involves looking at historical sales data to identify patterns of growth or decline, providing a basis for forecasting market movements.
• Recognizing Geographical Nuances: Even within the same neighborhood, different sections can vary significantly in desirability and value. Factors such as proximity to amenities, scenic views, or even specific school districts can affect property valuation. Understanding these geographical nuances is crucial for accurate comp analysis.
• Staying Informed on Local Developments: Future developments can dramatically impact property values. Being aware of upcoming projects, such as new transportation infrastructure, commercial complexes, or urban green spaces, can provide insight into potential value increases, positioning stakeholders to make timely decisions.

Where Can I Find Real Estate Comps?

So, now that you know what real estate comps are, what they’re used for, and what factors to consider when using them, let’s take a deep dive into where exactly you can find accurate comps to help you determine your property’s value. 

1. Real estate websites

One way to find comps in your area is to use an established real estate listing website for your research. Many websites, like Zillow.com, offer a “Recently Sold” filter, which allows you to search for homes that were recently sold in your area with similar features to the property that you’re listing.

There are also additional filters that you can utilize to narrow your search even more. You can filter “number of bedrooms”, “square footage”, “lot size”, “year built”, and many more factors to find houses that are most comparable to yours.

This information is extremely valuable whether you’re looking to buy or sell a house. From here, you’ll be able to estimate a reasonable starting price that reflects the current housing market. Unfortunately, this method doesn’t account for all of the factors that could impact your property’s value, such as the current condition of your home and any upgrades you may have added to it. However, it is a great way to get an initial idea of what to expect.

2. Physically research your area

Another way to find comparable homes in your area is to physically research properties near you. By driving around and finding homes that have similar features to yours, you can get an idea of what your property may be worth.

Keep an eye out for “For Sale” signs and “Sold” signs during your search. For Sale signs can serve as a good indicator of the price range that house may be worth, but it might not always be entirely accurate since many homeowners start high with the expectation that buyers will attempt to negotiate down. Sold signs, however, can help you find the exact price of the property that was recently sold. All you need to do is reach out to the real estate agent responsible for the sale, or check an established real estate website’s recently sold database.

The great part about utilizing this method is that the homes you’re analyzing are in such close proximity to your own, which means that the estimations will be more accurate than properties that are listed further away. The more comparable homes that you can find near you, the better grasp you can get on what you should be listing your property for.

3. Work with your real estate agent to pull MLS comps

One of the most reliable ways to get accurate real estate comps is to work with a local real estate agent to pull MLS comps. The MLS is a fantastic resource because it provides the most updated and easy-to-access information when it comes to pulling comps. However, one of the downsides to MLS is that it can only be accessed by licensed real estate agents.

A benefit of working with a real estate professional to to pull comps is that you’re working alongside someone who is used to running and analyzing comps on a regular basis. This can also be particularly helpful if you’re interested in buying a unique property that may be difficult to find comparables for.

Real estate agents pull comps from the MLS on a daily basis to provide clients with an accurate price range when listing a property for sale. Additionally, agents know if properties have increased or decreased in value, if the fair market value is accurate, or if a property’s value is not on par with other homes in the area.

4. Public property records

Public property records are another valuable resource that you can use to pull real estate comps.

The downside to public property records is that you’ll only be able to see a property’s last recorded sale price, meaning that the price could be extremely outdated and not reflect the market’s current conditions. If there are very few recent transactions in a specific area, you may not be able to find any relevant comps to help you with your own listing. So, while public property records may be a good starting point for finding real estate comps, you may need to do additional research to ensure that the numbers you’re getting are accurate and up-to-date.

The great thing about public property records is that you can often access them for free in most counties. By simply going online and searching for your county or city’s property records website, you can find comparable homes in your area and what they were recently sold for.

5. Comparative market analysis (CMA)

A comparative market analysis, or a “CMA”, may yield the most accurate real estate comps that you’ll need when listing your property for sale. A comparative market analysis is an estimate of a home’s value based on recently sold, similar properties in the area. Real estate agents and brokers create CMA reports to help sellers set listing prices for their homes and to help buyers make competitive offers.

A CMA can help you find the “sweet spot” you need to sell your home quickly and efficiently. It can offer you a listing price that isn’t too low, to where you’ll end up selling it for less than you should’ve, or too high, to where there are no offers whatsoever.

CMAs provide the most accurate data and details about a property and its surrounding location by comparing it to other homes nearby that are similar in size and have similar features. However, an agent’s CMA is more than just the numbers. The real estate professional will provide you with expert advice to help you assess the home, the current market, prices, and other factors that could affect your listing price.

Typically, a CMA will include:

• The address of the property and three to five comps in the area
• Description of each comparable property, including elevation, floor plan, and the number of bedrooms and bathrooms
• The square footage of each property
• The sales price of each comparable property
• Dollar adjustments that will be made for any differences
• The adjusted sold price per square foot of each comp

Related: Best Real Estate Comp Software

Detailed Strategies for Accurate Comps

Navigating the complexities of real estate transactions requires a keen understanding of how to evaluate comparable sales data effectively. Here’s a deeper dive into strategies that ensure the accuracy of your comps.

Focus on Location: The Cornerstone of a Reliable Comp Analysis

The value of a property is profoundly influenced by its location, making it essential to select comparables within the same neighborhood or a similar environment. For precision, urban properties demand comparisons block by block, while rural properties allow for a slightly broader scope. This strategy ensures the comparables share common market influences, providing a realistic basis for evaluation.

Recent Sales: Capturing the Pulse of the Current Market

In a constantly shifting real estate landscape, recent sales data offer the clearest reflection of current market conditions. Prioritizing transactions from the last three to six months helps align your analysis with the latest market dynamics, ensuring your comps are both relevant and timely. Adjustments for faster-moving markets may be necessary to stay abreast of the latest trends.

Comparable Features: The Art of Matching and Adjusting

Identifying properties with similar characteristics such as size, age, and amenities ensures a like-for-like comparison. Given the rarity of perfect matches, proficiency in adjusting for differences becomes pivotal. Whether it’s accounting for a swimming pool or a newly renovated kitchen, understanding how specific features impact value allows for more nuanced and accurate adjustments in your comp analysis.

Market Trends: Interpreting the Broader Economic Landscape

Awareness of whether you’re in a buyer’s or seller’s market is critical for adjusting your comps accurately. This involves recognizing how broader market forces, such as inventory levels and buyer demand, influence sale prices and adjusting your comps to reflect these realities. Staying informed about local and national economic indicators can provide valuable context for your comparative analysis.

Tips for Effective Use of Comps

Maximizing the utility of property comps involves more than just collecting data; it requires strategic analysis and interpretation.

Diversify Your Sources: Ensuring a Multi-Faceted View of the Market

Leveraging a variety of sources for your comps, from MLS listings to public records and professional networks, enriches your dataset and provides a comprehensive market overview. This diversified approach mitigates the risk of outliers and ensures a balanced perspective, which is important for making informed real estate decisions.

Adjustment Mastery: Fine-Tuning Your Comps for Precision

Skill in making accurate adjustments for differences between properties is essential for reliable comp analysis. Whether quantifying the value of a property upgrade or the impact of a superior location, a systematic adjustment approach can refine your valuation, providing clarity and confidence in your real estate assessments.

Consult With Professionals: Gaining Insights From Those in the Field

While digital tools have made accessing comps easier, the expertise of real estate professionals adds invaluable depth to your analysis. Their firsthand experience with local market trends and property valuations can enhance your understanding of how specific factors influence property values, offering a richer, more nuanced perspective on your comps.

Conclusion

There are many different ways to find real estate comps when you’re looking to list your property for sale, or trying to figure out what you should realistically pay for a home in a specific location. When looking to list your home, keep in mind that the main goal is to list your property at a reasonable price, not too low or too high, so that you don’t leave money on the table and you sell it within a reasonable amount of time. 

Utilize all of the resources that are available to you, including online resources like real estate websites and public property records, and local real estate professionals who are familiar with property value in the area, as well as the status of the current market. Also, don’t be afraid to venture out and pull some comps of your own within the community by searching for local properties that are for sale or were recently sold. 

The more research you conduct beforehand, the better understanding you will have of the current conditions of the real estate market and the value of similar homes in your area. In the long run, this will help you tremendously in determining the right price to list your home for when looking to sell.

FAQs on Gathering and Utilizing Property Comps

How do I ensure the comps I’m using are relevant to my property?

To ensure relevance, focus on selecting comps that are geographically close to your property, ideally within the same neighborhood. Look for properties with similar features such as size, age, condition, and unique amenities. Prioritize recent sales, preferably within the last 3-6 months, to reflect current market conditions.

Can I use comps from a different neighborhood if I can’t find enough in my own?

While it’s best to find comps within the same neighborhood due to similar market influences, if necessary, you can look at nearby areas with comparable characteristics. Ensure these areas share similar amenities, demographics, and property values. Adjustments might be needed to account for even slight differences in location.

How do recent renovations or upgrades impact my property’s comps?

Renovations and upgrades can significantly impact property value. When selecting comps, try to find properties with similar improvements. If exact matches are challenging to find, adjustments will be required. For instance, if your property has a newly renovated kitchen, you may need to adjust the comp prices upwards for properties without similar upgrades.

What if the market conditions have changed rapidly in the last few months?

Rapid changes in market conditions require a closer examination of the most recent comps available, sometimes narrowing the timeframe to the last 1-2 months. It’s important to stay informed about current market trends, such as shifts from a seller’s to a buyer’s market, and adjust your analysis accordingly to maintain accuracy.

How often should I update my comps analysis?

Updating your comps analysis depends on the pace of the market. In a stable market, reviewing your comps every 3-6 months may be sufficient. However, in more volatile markets, it may be necessary to update your analysis more frequently, even as often as monthly, to ensure your information reflects the latest market conditions.

Do I need a real estate agent to get accurate comps?

While you can gather comps independently using public records and online platforms, partnering with a real estate agent can provide you access to the most current and comprehensive data, particularly from the MLS. Agents can also offer valuable insights into how different factors influence property values in your area.

How significant are geographical nuances within the same neighborhood?

Even within the same neighborhood, geographical nuances like proximity to schools, parks, or commercial districts can affect property values. It’s important to consider these nuances when selecting comps and make adjustments based on these locational advantages or disadvantages.

Can I rely solely on online real estate platforms for my comps?

While online platforms provide a convenient starting point for gathering comps, they may not always offer the complete picture, especially concerning the most recent sales or off-market transactions. Cross-referencing data from multiple sources, including public records and consultations with real estate professionals, is recommended for a comprehensive analysis.