What makes good comps?
Lets say that there are two houses with same beds and baths, right next to each other, but one is a ranch and the other is a cape cod or colonial?
5 BR house comps are in the $50's and there are 2 and 3 BR houses up in the $70's.
What is alright to use, and what are the exceptions?
Give some examples.
Running comps is a brutal game. The amount of work and information needed goes up dramatically depending on the accuracy you would like. Sometimes the information is simply not available within the geographic range you would like.
Schools make a huge difference. That is how I define my wider (and sometimes only) geographic area. A poorly rated school makes no difference to people without children, but generally is considered to pull the value of property down.
Square footage is another good indicator of relative value. Is a 2200 sq foot property 10% more valuable than a 2000 sq ft one? Not based solely on size in most cases.
What condition is the property in? What upgrades are on the house? All of this is relative to the other houses in the area. A pool in Alaska doesn't add much, if any value, unless it is indoors and usable year round.
Another consideration is the market trends. Are sale prices generally going up, down or not moving at all? What causes houses in the area to sell?
To your question: Why are 5 beds selling for less than 2 beds? The 2 bed is probably in much better condition, located on a nicer street and feeds a superior school. Or something else entirely :)
Thank you for the info. Now I can work off something.
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