We all get wrapped up in finding deals, but would you know if it was a good one?
- Comparable Values
- Cost to Repair
- Holding Costs
Today we are going to look at Comparable Values or comps.
You are going to want to find comparable values for what the home would be worth all fixed up. So as you are looking at resources for comps look for homes that are in good or repaired condition. And be sure you are comparing apples to apples or rather you have homes with similar size, style, age, and amenities.
But the next big question is where to find comparables to review? Tim Randle mentions in his online article “How to Get Comps” that you have four resources:
- Doing your own research
- Internet searches
- Service Companies
- Access to MLS
So let’s break these down:
Doing your own research: By far the hardest, but you should use this to some extent as it will educate you more on your market place.
• Review ads in the newspaper and online to see what people are asking.
• If your county or state records sales prices, visit the recorder of deeds office.
• Take a look at tax appraisal values.
• And over all get to know the neighborhood by staying up to date on everything listed, touring when they are for sale, and tracking what they sell for when they close.
Internet Searches: Next you can take a look at several different real estate web sites that offer homes for sale and see what valuations they might offer. Sites like:
These are good sites to find a rough estimate of value, but are not very accurate.
Service Companies: There are companies that offer an online valuation service. These sites glean their data primarily from recorded data from the courthouse, not actual recorded sales and then they calculate a sales price from the data, like the mortgage price recorded. Sites like:
While these sites have some value, it is advisable to check your results with our next method. (Another use of these sites is to build marketing lists for direct mail marketing for motivated sellers.)
Access to the MLS: By far the best way to get access to comparables for your property analysis will be with access to the MLS. The MLS stands for Multiple Listing Service and is the local site where Realtors list properties for sale and record pending sales, expired listings, and actual sales values.
To gain access to the MLS, you have four choices:
1. Hire a Realtor to do comparable searches for you, but after one or two freebies, be prepared to pay for the service.
2. Become a Real Estate Appraiser.
3. Become an assistant to a local Realtor and have them sign you up for your own access as their assistant.
4. Obtain your own Real Estate License so you can have access as a Realtor and gain some of the other benefits of being a realtor.