how to determine value after getting comps from mls. should you average, or just take the highest comp. thanks
@William Rankins What you want to do when looking at comps is "compare" them to the property you are trying to place value on. You want to look at the details of the sold property, such as:
- What is the age of the comp in comparison to yours?
- What is the size of the comp in comparison?
- What are the finishes like? (crown moulding, countertops, appliances, flooring, bathroom fixtures, etc.)
- What is the size of the lot in comparison, landscaping, etc.?
- What is the neighborhood like?
After yuo have the answers to that, then you make a determination if your property is a higher or lower value, etc., and what the differences add up to. Once you have all of that information, you have a value. What is the cost per square foot of your listing compared to the comps?
Too often people pull comps and don't dig in to the details. By doing that, you can make a huge mistake on the actual values of property. You want to make sure you are comparing apples to apples. Good luck!
You try to make the same sort of adjustments as an appraiser would make.
@William Rankins are source of bigger pockets, is a book by J. Scott called 'The Book on Flipping Houses,' in this book there is an good read on comps. Chapter 8, The flip formula. It details the parameters and the process used to adjust by these parameters. It's great because you can compare 3/2's with 4/2's or homes with a garage vs carport ... It will help your evaluation tremendously.
This is a book in a two part series and is full of relevant information for all investors.
There's good advice above but back to your original question. The answer is 'it depends'. It's bad practice to blindly average results to determine a value. Appraisers usually put the most weight on the most similar comparison. If you are lucky enough to have several highly similar sales it's not so difficult. If your not that lucky it's a whole different barrel of monkeys. Hope that helped a little.
Follow Karen's advice.
find which property is closest in criteria to your property
I have also found this site to be helpful in determining comps. For me its been pretty close to MLS comps in my area
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