Which Is Better For Running Comps; Propstream or Dealmachine

[Lucas Schlund]

Newer investor here! I know that running comps is something that needs practice to understand, but as somebody who is still learning, I like getting a rough idea through dealmachine/propstream. Considering they are the same price and both have there pros/cons, as far as running comps goes, which is more accurate?

[Jon Gibbens]

I wouldn't trust the value provided for either, I use propstream for a multitude of things, but I always run my own comps. The best way to do it is to use something like redfin to see what has sold in the same zip code and same neighborhood boundaries as your subject property within the past 3-6 months. Filter by +/- 12 years on year built, +/- 150 sq ft and see if there are any like comps that have sold and for what they've sold. 

The issue with using comps on any type of software, especially propstream or dealmachine is that they tend to use an "estimated value" of the homes that they are using for comps, not actually comparing to what has sold recently in the area or what is currently listed, not accounting for DOM (day on market) or other market shifts that play into realistic valuation of a property. As an example, you may have a property that one of those systems says has a "value" of X (let's say $500K), and they have all sorts of nearby "comps" that are in the same value range. However, when you pull up the current market, you see that nothing comparable has sold in the past 6 months, and that the currently listed properties have been on market for far too long, meaning this is an area where there are no buyers, no appetite for these homes. The home can be worth as much as you'd like it to be, if there is no one to buy the home or dispo it to, it might as well be worthless. 

I hope that all makes sense! Always run your own comps, don't trust software to do it for you.