Suggests for "Comp" software

[Mel Park]

Happy New Year all....

Curious if anyone can suggest the right software for figuring out comps.  Yes, I can guesstimate based on previous sales, etc --  but sometimes the same house in the same zip code - can sell for vastly different sums depending on what part of town it is.  Is there software that is mostly accurate for comps?

I'd like to buy a rehab home -- but want to get a pretty accurate read what the house is worth if made ready for sale.  Thanks

[Eric Fernwood]

Quote from @Frank Greg:

 There are of course pros and cons with this. The more you drift toward the realm of the "subjective", that can also be a problem as the result becomes more vulnerable to what often can be substantial manipulation if the realtor for instance has an interest in the transaction.

If software has any advantage, there is some value in knowing what the average or mean is for an area based on several hundred or thousand+ transactions as opposed to 10 or 12 properties (or less) in a manual computation. 

Most apps or website can also enable the user to quickly get a ballpark feel/pulse for an area -- which can be helpful if you have thousands of potential deals to sift through. 

 Hello Frank,

You are correct; software can give you an average price for an area, as you see on Zillow and other sites. However, such software cannot provide accurate (or even reasonable) information on a specific property. Below are some examples.

Software is good with analytical data (SF, beds, baths, etc.) but fails with subjective data. For example, suppose you have two properties. One property is in exceptional condition, and another is in poor condition. Software will determine the average $/SF for the area and multiply this by the subject property SF. This means that the predicted price will be low for the property in exceptional condition and high for the property in poor condition. Software fails in other ways too.

Are the comps below good comparables to the subject property? The answer is no. The properties are similar in size and such, but the subject property is next to a freeway, which is very loud. The comps do not have the freeway noise. In such a case, the subject property might look like a bargain, but in reality, it might be overpriced.

Below is another example. The subject property is in a community where the prices are about $180/SF. Across the road is a completely different community, with prices ranging between $280/SF to $310/SF. Because the properties are in close proximity and similar in size, they will be included in the price calculation for the subject property, which is invalid. So the subject property might appear to be a bargain, even if it is overpriced.

Online software can tell you the average $/SF for an area, but provides no useful information for any specific property. Never evaluate a property based on Zillow, Rentometer, Redfin, or any other similar source. The only way to evaluate a property is to have a knowledgeable person evaluate the specific property based on similar recent comps, taking into account location and condition differences.