Comps

3 Replies

I currently have a absentee owners list and I decided to do a little bit of practice with comps, but I ran into a problem. The area where the home is located does not have any recently sold homes so how do I get the comps? 

Originally posted by @Angel Colindres :

I currently have a absentee owners list and I decided to do a little bit of practice with comps, but I ran into a problem. The area where the home is located does not have any recently sold homes so how do I get the comps? 

Is the lack of sale a matter of low or no inventory in the area? You want to have a realtor try to get some sort of estimate although it may vary from what the appraiser might think.

If there are very few comps in that area, that probably means very few houses are selling in that area.  That could be a leading indicator for how difficult it may be to sell a house in that area.

If there aren't any comps in the immediate area you'll have to expand your search in some way. If there are no sales at all in the nearby area look further away but in similar neighborhoods. Alternatively, you can go back further in time and try to apply a percentage increase or decrease based on what the market is done in that area. Or you can find homes that are not directly comparable in square footage, number of bedrooms, garage, other features and make adjustments for those.

If you know another local investor or realtor you can ask them how they would go about finding comps in that area. Comping a property is part science, part art and sometimes the more experienced folks know a few tricks based on the area.

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here