When looking at comps how much should I adjust for bedrooms, bathroom, pool, square feet and outdated houses?
I've been doing 10k for bedroom, 2.5k for 1/2 bath, 15k for pool, 110 per foot and 15k for outdated. I'm in central Fl.
Thanks for any help.
I'm not sure of your market, so I can't answer confidently, however are you adjusting $110/SF or was that a typo? I have always used a $30/SF adjustment as that seems to be the standard used by appraisers (in my area) for above grade finished SF. I also do my best to not use outdated comps, and only houses that have had fairly similar renovations. This can be tough, and if I can't find any, I find well maintained houses and use no adjustment. I then feel I will have the best house in my price range.
When we analyze comps we always try to evaluate through the eyes of an appraiser to avoid as little as possible re-negotiations on price which sometimes can kill a deal at that point. Appraisers evaluation is always based upon their "opinion" on similar comps with similar upgrades, features, etc. Saying that, I have found the following to be the most successful in analyzing comps -
1 - Gather all the recent properties sold, similar in sq. ft., bedrooms/bathrooms, and features (e.g. pool, golf course view)
2 - Based upon that group, condense the list to the homes that are the most similar to the subject homes in upgrades, features, acres, etc. The "condition" of the property is very important!
3 - Calculate the average sales price based upon that condensed group.
4 - With that information, you can decide based upon the homes that are similar to the subject home, what the max, average, and minimum priced home sold at and decide where you want to be within that scale.
4 - It is also important to know, how many days the property was on the market because it will give you an idea on what price point made the home move faster.
Hope that made sense and helps! Best wishes on your sale!
I use a spreadsheet that I've developed myself. I list out all of the features that drive value - Style, beds, baths, square feet, acres, garage, basement type, septic status, days on market, whether REO or short sale, year built, condition, price and $/sq ft.
Three sections - Section 1 is the subject property.
Section 2 is sold properties, preferably sold within 6 months and within 1/4 mile. I often have to bump out the distance and time frame if there is insufficient data.
Section 3 is what's on the market now.
I try to match the style if possible and especially the number of beds. I try to keep square footage within 10% or so.
The key to the exercise is to eliminate any preconceived notions regarding the ARV.
I did a set of comps for another BPer yesterday and found that a home I initially thought would end up at about $400K will actually end up at $475K and possibly $500K.
No eraser math - let the numbers speak for themselves and tell the story.
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