Updated almost 6 years ago on . Most recent reply
How to come properly
Good afternoon. I am a new investor. I wanted to know how to comp a house in a neighborhood where prices vary. I'm looking at a house and attempting to figure out the ARV. The house across the street that's similar sold for 1.5 million. A house down the street that similar sold for 600. A couple house down sold for 900 and a house on the next block sold for 800! How do I come this house? All the houses have similar square footage, bed, baths, etc.
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If there are properties on the same street that are ranging $900K from one another, there is something that is setting them apart from one another. It doesn't sound like it is an apples to apples comparison. I'd start by evaluating the actual houses and features of each. Make sure you're excluding distressed sales; distressed sales should not be used because the buyer pool is much lower and usually does not entice the retail buyers that same way a turnkey property does. Additionally, there are stressors pushing the price down from external sources. Make sure all the transactions are recent within the last 6 months. Are there different lot sizes, finishes, property style? A good example in my local area is that split ranches don't sell nearly as well as capes. You can have a 3/2 cape and a 3/2 split ranch with the exact same square footage in the same neighborhood with 100s of thousands of difference in price.