How many comps do I HAVE to get?

Question

How many comps must I have to determine a house ARV? I found some good comps for a few houses, but they are only a few comps like 5 or less.

Tony Marcelle · Answer

Account Closed I have never been to Fairbanks, Alaska, but I am only guessing not many outdoor swimming pool comps.

Chris Mason · Answer

5 solid comps is fine.

CCCR: Close, comparable, closed, and recent.

Close: within a half mile and not across any barriers like highways or RR tracks or rivers.

Comparable: Duplexes to duplexes, condos to condos, detached SFRs to detached SFRs. Ideally same bedroom count.

Closed: List price is not a good data point. Final sales price on a closed transaction is.

Recent: Ideally less than 3 months old, go to six if you must, go to 12 months if you absolutely must (but in this case you need to SERIOUSLY question market demand for this type of home if no one in the last year has bought a similar home... guess how many outdoor swimming pool comps I'd find in Fairbanks, Alaska?)

Account Closed · Answer

Your Comment: "I have never been to Fairbanks, Alaska, but I am only guessing not many outdoor swimming pool comps."

I haven't been to AL for a while but I'm betting there aren't too many dog sled training properties. ;-) Oddly enough, there are a bunch of ice skating rinks and ice hockey here in the desert. Canadian, Wisconsin and Minnesota snow birds winter here. Go figure.

And apparently they are very friendly.

Anyway, you always do "the best you can" and let the buyer get into it deeper if they want to.

Account Closed · Answer

If they are *good* comps (within 1/2 mile, sold in the last 6 months, same basic floor plan, same basic vintage, same basic upgrades, same side of the freeway or river, or mall etc) then 3 is fine.

Tim Swierczek · Answer

@Tony Marcelle  look for the cons to be the same style of bills for example ramblers into stories are always more valuable than split levels. Most novice investors make this mistake they look for the most expensive sales to see if they can justify a higher price but they ignore features the buyers really care about Ling stay in the home. If you have one pump to truly high and the rest are all low that’s telling you something. Even if you have a few little chunks and if you hike hunch that’s also telling you something you have to take your emotion out of it and really look at the data.

Scott Schultz · Answer

depends on location, in a city they should be within .5 mi, in a suburb 1 mile and rural  5 miles but unique properties can be stretched further, I have done thousands of BPO's for banks, the rules were 3 listed and 3 solds, within 20% speck and similar condition, and make appropriate adjustments for differences, there is more art than science to it. Understanding market conditions is key, and getting to know the little things that have huge value influences, now if you have a cookie cutter home with plenty of sales it pretty easy, but if its an oddball with little market activity, it can be kind of a crap shoot, go with your gut and be conservative on the numbers, its way better to be off on the low side than way over valuing. good luck!

How many comps do I HAVE to get?

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