BiggerPockets

You can find sold listings on Trulia.com and zillow.com to compare with. Just keep an eye on the dates of the sale, and make sure you are using actual sales numbers, as apposed to zestimates.

I found I was pretty accurate this way prior to getting MLS access.

I've seen wide variation in prices on Trulia and Zillow, that don't reflect actual value. I'm sure you can ask a Realtor to run some comps for you, especially if you might buy or sell through them. That's definitely the easiest and most accurate.

Recent sold comps from the MLS. Make sure they come close to the actual property's attributes(ie size,style,# beds/bath)

As close as possible. If not a mile try 2 so forth and so on.

If there's nothing within the same subdivision, finding comps is a little tougher. Like you, I try to look for sold comps within the same development rather than go strictly by proximity. But once you venture outside a subdivision, all bets are off if you go simply by distance.

For example, we live in a tract of homes that run along the west side of a creek and spans about 1 mile in length. Using comps anywhere in this development allows me to compare similar models with each other. However, there are several homes lying just over the ridge less than 1/4 mile from our house that are completely in another city and zip code! What those homes sell for tells me very little about the value of our own. Even 1/3 mile away, there are several homes, but they are on the other side of the creek and main boulevard in another tract. Homes further away, but in our same development make for better comps than many homes that might be physically closer.

So what do you do if there aren't any sold comps in the same tract? I look at other tracts with similar characteristics. That's not very hard to do in the relatively newer parts of SoCal because developers pretty much took a cookie cutter approach to most projects. About 1.5 miles away, my parents live in a tract of homes very similar to ours, just built a few years earlier. Many of their models share striking similarities to ours. And the amenities of the area, i.e., school districts, proximity to shopping and jobs, etc. are all the same. Basically, figure out what makes one group of homes attractive to a buyer/renter and see what other neighborhoods offer the same living experience.

It's not perfect, but it's better than a SWAG (Scientific Wild A$$ Guess). :mrgreen:

Try to keep your comps within the last 3 months; oftentimes trulia and zillow are not recent and can be deceiving. You can only get an idea, but at that they are not what you want to rely on for comps.

There is a site in many major cities across the US called redfin. I love redfin, and it has 10 comps at the bottom, but even better than that, you can pull up a map and go directly to handpick your comps.

1. Try to stay in the same neighborhood like many have said here, but if there isn't enough comps, stay within a mile if possible.

2. Try to only go back 3 months; if there aren't enough try 6

3. Stay within 1 bed and 1 bath, and try to stay the same if possible

4. Stay within 500 square feet; the close in size the better

5. I like to use 10 comps, but try to use at least 5 (the more the better). I like to be conservative because usually the appraisers are.

6. Do not use listings; use sold comps

7. Calculate the cost per square feet for each .

8. Remove the highest and lowest PER SQUARE FEET values

9. Take the remaining prices per square feet and find the average.

10. Multiply that number by the square footage of the property you are comping.

If I'm doing a rehab on the property with more than $25K in repairs, I usually subtract $10K from the ARV only because our market in my area is still declining slightly. You can talk to a realtor in your area to find out the market trends for your city; or you can look in the paper in the real estate section; there is usually a section that talks about the trends.

As to comps and range. First you look in the subdivision, then move out within 1 mile, then within 3 miles, then within 5 miles, then over 5 miles. Taking all the comps in the same subdivision takes into consideration the maturity of the subdivision and per centage of the built up lots. In a mature subdivision you can do that and when there are sufficient homes to ensure that three sale do not skew the analysis.

For example, in a new subdivision, where 4 out of 30 lots were built and sold are not good comps for the 5th house, 2 comps in that subdivison might be used with another from the neighborhood.

A neighborhood is not necessairly a subdivision, it is a generally more of the soci-economic area identifed by similar attributes. It is very common for values to be significantly different from one neighborhood to another or one subdivision to another. These factors must also be considered as to the desirability (which reflets on marketability) from one area to another and such assumptions can usually be shown in the market. Failing to identify these differences will skew your analysis as valuation is not strictly a math formula of square footage costs and adjusting for amenities.

These influences will be magnified as you move further away from the subject property. For example, while a house may have a similar price, the proximity to a hospital or shopping area may be different than one close r to an industrial complex.

It's an art as much as a science. Study it as an art and you'll get the science.

Hmm, I've always gotten within 3-10K of what the appraised value is this way... always has worked for me like a charm here in Southern CA, and every time my value was less than the appraisers because they only take 3-5 comps, and you do never know which ones they'll take; but here in LA area, if you took all the comps you'd have 100s of them at times depending on how dense the area is. I always do take ALL the comps within the immediate area that are within 500 square feet (or less) though, as they do not use comps that are too big or too small , ever.

For reference, over the past dozen or so sales I've done to FHA buyers, I've noticed the appraisers are happy to go back to near 12 months and out to about 1.5 miles to find non-foreclosure comps.

Certainly, they prefer comps that are newer and closer, but they appear to be loosening up their standards in the face of the current market.

At least that's been my experience over the past several months...

That's good news Jason! As the limit is one year and they are moving further out. FHA and VA need to see comps within 3 miles and when one goes out within 5, there is alot of jsutification as to why they went so far out. So your observation is good news that lenders might be getting a little bolder.....if you could call that bold underwriting....LOL