Having difficult time finding comps.. Am I doing this right?

7 Replies

So ive been doing trying to find comps for homes that Ive been randomly selecting or see that are fsbo, in order to practice how I would go about finding deals. I get the address and then use the apps, zillow, realtor.com, trulia, homesnap, and redfin although not available in my area. I do a search for sold homes with similar rooms/bath/sqft on the same street. This usually results in 1 or 2 homes within the last few years if im lucky. Zillow will come up with its 'zestimate' but have been told not to put too much weight into this. The 'zestimate' will also be double the value of sold homes in a different neighborhood, which makes me think that an investor has picked up the sold homes, no clue as to how to find this out for sure though. Im wondering if Im going about this the wrong way on finding comps, or if I should tweak my searches. Also came across the corelogics realquest service, would this service be worth using and be more reliable than the free resources? Thanks for any tips in advance!

@Pedro Oliva  

Zillow has changed their website and not in a good way either, imo. realtors.com should be better for pulling comps. Narrow it down by typing in the city/state and zip of the subject property and then click the drop down box for 'recent sold by date' to get the latest. 

You may have to check google map to see the distance between the compared property and the subject property. Some buyers only want within 1/2mile distance as apposed to 1 full mile radius. 

Kudos,

Mary

Have you thought about taking an appraiser class from a local community college? If you decide to not take the class, get the text. Read it and use it to do your own analysis. Study the county public record. Get facts (not zestimates), apply the appraisal discipline, and reap the rewards for knowing how to correctly calculate valuations. My 2 bitcents

You need sales preferable less than 6 months old. The closer to the subject the better. If you can find them one mile or less and within 6 months that is a good start. You need to find similar properties and then make adjustments for age, size, condition. You always make adjustments to the comps, not the subject property. As a guideline, if the houses in you area are selling for $100 per sq ft and the comp is 300 sq ft larger than the house you want to determine value, then take 30k off the comp (it brought 30K more because of its larger size). If the comp is 14 years older than the subject, adjust $1000 per year so add $14K to the subject. If the comp has 2 baths and the subject 3 baths, add 7K to the comp (it would have brought 7k more with 3 baths). This is just a general method and some figures may vary. These are just a few examples. You might need to figure adding or subtracting for size, age, condition, quality of construction, views, etc. There could also be differences for location (a busy street vs a quiet street), lots size, swimming pools, etc. The list goes on. The more similar the properties, the smallest amount of time since the sale, and the closer proximity help make it easier to do less adjustments to determine what it might sell for. Hope this helps.

p.s.--if there are outside influences that affected the sales price (death, divorce, etc) these sales need to be tossed aside because they do not reflect a typical sale. A typical sale will be a property properly exposed to the market for a normal amount of time that resulted in a knowledgeable buyer and knowledgeable seller reaching an agreed upon price. If grandma got sheistered by some fast talking wholesaler who didn't have money to purchase it and then assigned a contract for a 2K fee this would not meet the definition of a knowledgeable buyer/seller.

well the main problem is that no recently sold listings come up making it very difficult to get a value on the property. What do you do in this case when comps do not show up?

@Pedro Oliva  avoid using automated systems to calculate value. As those systems can not calculate for needed repairs, upgrades, other factors that may affect value like backing up to a major freeway or train, or if the place has been vandalized etc.

If you are not an agent then you should find a good buyer's agent to work with. have then provide you with a free CMA on the properties you are interested in. The agent will do this for free in an attempt to earn your business and represent you once you do find a deal. The seller's typically pay the commissions so there is no out of pocket expense for you the buyer should you find a deal. Your agent will be able to pull recent sold listings and adjust for the differences and give you a much more accurate value for the property. Your agent can also look to see what other homes are available for sale in the community as well as what other listings are under contract in order to get a feel for which direction the community's values are heading. An automated system can not do any of this.

I hope this is helpful.

The best source for finding comps is MLS. This is available to real estate agents/brokers. Many Real Estate Brokers will prepare a CMA (Comparative Market Analysis) for you for a fee. If you need this information for one or two neighborhoods, it may be worth it to pay for a CMA.

A way to get access to MLS yourself is to find a broker that needs some help with something and volunteer to help them in exchange for admin/assistant access to their account on MLS. They may also be willing to give you access if you pay their annual MLS fees. Develop a relationship with some brokers and see what you can work out.

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