A comparable sale, more commonly referred to as “comp” in real estate lingo, is a recently sold property that is very similar to your property. Comps can be helpful in determining market value and deciding on a listing price for your home.
1. Proximity – The most relevant comp is going to be in your neighborhood, but homes as far as a half-mile away are great, too. If you are in a rural area, this distance will be considerably farther, but try to stay in the same school district.
2. Date of Sale – Some say you compare your home to those sold up to six months ago, but real estate agents generally recommend not going back past three months due to fluctuations in the market.
3. Listing Date – When you look at sold homes, you need to also look at when they were listed. This will give you an idea of how fast homes in your area are moving on the market.
4. Listing Price vs. Sold Price – It is important to not look only at the closing price. By comparing listing and closing prices, you will see if sellers are being forced to reduce prices to generate interest or if many homes have had a bidding war due to low pricing. A bidding war is ideal, but you want to make sure you are not leaving money on the table, as well.
5. Active Listings – When determining listing price don’t limit yourself to only exploring comparable sales. Looking at your direct competition in active listings can help, too. Pending sales should also be compared.
6. Square Footage – Look for homes with a similar square footage to compare. However, understand that you can’t just double the price of a 1,000-square-foot home to determine a price for one twice its size. Per square-foot cost is typically higher in smaller homes. Compare houses within 10 percent of your property’s square footage.
7. Lot Size – Is it more desirable to have a small hone on several acres or a large home on a zero-lot? Well, there’s not a right or wrong answer. Everyone has a unique opinion and needs.
8. Age and Construction – Compare houses that are built within five years of your home. They should be similar styles, too. So, if you have a multilevel structure, log cabin, Victorian dollhouse, or urban row house, compare to others with the same construction, when possible.
9. Condition and Amenities – Whether a home is a fixer-upper or completely renovated is an important point to consider. Also, look at what amenities the comparison property includes.
Exploring comparable sales can be very helpful in determining a listing price for your home. You can browse the Internet to find this information or you can also ask your real estate agent to put together a comparable market analysis for you. Whatever you choose, make sure you use your comp list as a tool to help sell your home quickly.