Whether you are preparing to sale or to purchase a home – you are going to want to know what other similar homes are selling for in the immediate area. Comparables (comps for short) are properties similar to the subject property (ex., your home) that have recently sold and can be used to determine the price or value of your home.
The goal is to try to compare “apples to apples.” Similarities that you’ll want to look for and compare between the subject and the comparables include:
|bed/bath count||style of home||school districts|
|parking (garage/carport)||square footage||views|
|proximity to subject||lot size||traffic volume|
|when it sold||condition||how it sold|
As a starting point when searching for comps on single-family homes, you’ll most likely want to compare the bed and bath count of the subject property to other property sales in the area. It is best to find other homes that match the bed and bath count of the subject property. In other words, you really want to avoid comparing a 3 bedroom, 2 bathroom home to a 5 bedroom, 6 bathroom home if at all possible.
You’ll also want to make sure the homes you compare to are within 20% of the square footage of the subject property. Example – if your home is 1000 square feet (for easy math), you’ll want to look at homes with a range of 800 square feet to 1200 square feet; that’s 20% below and above your subject’s square footage.
Next, look for properties that are within close proximity to the subject property. If you can find comparable property sales in the immediate subdivision and/or neighborhood, that’s great! If not, span a radius around the subject starting with a ½ mile and work your way up in ½ mile increments until you find some that can compare. CAUTION: If this locates properties that are in areas that cross large highways, school districts or subdivisions that aren’t similar in views and traffic density to that of the subject property, exercise caution and try to avoid using those since price points can differ greatly on any of those changes.
Lastly, would be to compare the subject’s features to the comparables. Types of features to review for include, swimming pool, fireplace, patios/decks, master suite, etc. Anything that is considered a comfort or an enjoyable addition to a home would be something to try to match. Example – if your home has an in-ground pool, you’ll want to try to compare to other properties that have in-ground pools too.
The process can take a few minutes to hours depending on the property type and area. Local real estate agents are a great resource in looking for comparables – feel free to reach out today for assistance or advice on finding comps for your property!