How to modify/ adjust Comps to match my subject house

6 Replies

I have had a few responses from DM and D4D. In looking at comps (recent sales using iComps, Zillow or Realtor) I truly have a hodge podge of past sales. The site iComps gives me the most past sale to refer to . The problem is difficulty in matching houses sold to the house I am working with (there's actually 3 houses in the same 1 mile radius). One of the house I am going to offer on is built in 1957, well maintained and is a 3/1 house of 1400 sq ft. The recent sales are either over 6 months ago, are 3/2 houses or built in the 80's or 90s. There is one recent sale that is on the same street and a 3/1 but only 1032 sq ft sold almost a year ago and another 3/1 about a 1/3 mile away that is 1550 sq ft sold 7 months ago and another 3/1 1.3 miles away 1146 sq ft sold. How do I make adjustments in looking at the comps?

Thanks, Doug

You don't comps only take you so far the rest is merely an estimate what would you list the property for if you need more help you might partner with a realtor in exchange for leads that don't want to sell with you.

Well I was curious since I had a 3/1 house and the recent comps are 3/2 hours, do I deduct from the comps, say $10k (for a full bath), from the comps or add $10K to the rehab costs for a bathroom?

Originally posted by @Doug Haisten :

Well I was curious since I had a 3/1 house and the recent comps are 3/2 hours, do I deduct from the comps, say $10k (for a full bath), from the comps or add $10K to the rehab costs for a bathroom?

 Have you looked at what all the other houses on this street and in this particular neighborhood have? If most are 3 bed 2 bathrooms, then you likely need to find a way to add a second bathroom into the 3/1 subject property. If it is a healthy mix of 1 and 2 bathrooms, then you deduct from the comp for your lack of one bath and that will likely be more than $10k but I cant say for sure without knowing your area and all the comps.

@Doug Haisten

I wrote a BP blog post on the subject a while back:

https://www.biggerpockets.com/blogs/8814/68395-how...

You will want to adjust your comps not the subject property, so with respect to your example deduct from the comp if it has more of something than the subject.  The trick is in knowing how much each feature is worth in your particular farm area.  

In your example you're using comps from a 1000 sqft to a 1500.  I would say that range is too large to get any accuracy in your valuation. 

@Will Barnard I have been looking at what the other houses have. The block is mostly houses from the 1950's and listed as 0 bedrooms (no closets?)1 or 2 baths and the house (now houses) I am looking at are the ugliest house on the block. The houses are roughly 900 sq ft average wood frame while the crossing streets are much newer  (70's) and brick.

@Kuba F. Kuba, thank you for forwarding me the article.