Marino & Marino, P.C. Source: massrealestatenews.com
Real estate comps are essential in determining property value. They provide insights into comparable sales, helping buyers and sellers make informed decisions. Online platforms like Redfin, Realtor, and Zillow offer access to recently sold homes, while the MLS provides up-to-date and accurate comp information.
WHAT ARE REAL ESTATE COMPS?
Understanding the concept of real estate comps is vital in determining the value of a property. Comps for real estate, short for comparable sales, refer to properties similar to those evaluated in terms of location, size, condition, and features. These comps establish market value and determine the appropriate listing price or fair offer.
Whether you are a buyer or a seller, real estate comps play a crucial role in making informed decisions when it comes to pricing. Choosing comparable sales and pricing homes is an art and a science.
IMPORTANCE OF REAL ESTATE COMPS IN DETERMINING PROPERTY VALUE
The significance of comparable sales data cannot be overstated. Sellers utilize comps to determine the right selling price, ensuring they get a fair deal. On the other hand, buyers rely on comps to avoid overpaying for a property, ensuring they make a wise investment. Comps for homes provide valuable insights into market trends, allowing all parties to evaluate the property’s worth objectively.
DIFFERENT TYPES OF REAL ESTATE COMPS
Recent sales: These comps involve properties that have been recently sold in the same area. Analyzing these sales provides a current and accurate real estate market snapshot. Comparable sales are the most valuable information to determine current market value. Since the sales are closed, you know what a buyer would pay for a like property.
Contingent and pending sales: Contingent sales are when a buyer and seller have executed a contract to purchase, but open-ended contingencies must be satisfied. On the other hand, a pending sale is one where all the buyer’s contingencies have been completed. Contingent and pending sales differ quite a bit due to the release of contingencies. Even pending sales can fall through.
Active listings: Examining properties currently on the market helps gauge the competition and market demand. These comps can assist in setting a competitive listing price.
Withdrawn or expired listings: Properties taken off the market or couldn’t sell offer insights into unsuccessful pricing strategies or overpriced properties.
Off-market sales: While not always readily available, off-market sales can sometimes be accessed through exclusive databases or networking within the real estate community. Off-market homes or pocket listings will sometimes turn into relevant sales data.
A comprehensive understanding of these different types of real estate comps allows for a more thorough analysis and a more accurate property valuation.
WHO USES REAL ESTATE COMPS?
Home buyers and sellers heavily rely on real estate comps to determine the fair market value of a property. Buyers can ensure they are making a competitive offer by analyzing recent comparable sales, while sellers can set the right listing price.
Understanding the prices of similar properties in the exact location helps both parties negotiate effectively. Comparable sales will establish local market values, whether buying a new home or a resale property.
REAL ESTATE AGENTS AND BROKERS
Real estate agents and brokers are crucial in assisting buyers and sellers. They utilize real estate comps to provide accurate and data-driven advice to their clients. By analyzing comps, agents can help sellers determine the best listing price, showcase the property’s competitive advantage, and attract potential buyers.
For buyers, agents use comps to guide them towards suitable properties within their budget.
APPRAISERS AND LENDERS
Lenders and appraisers rely on real estate comps to determine the value of a property for mortgage financing purposes. Appraisers use comparable sales as a benchmark to evaluate the property’s worth, ensuring it aligns with the loan amount. Lenders also consider comps when determining whether a loan request meets their lending criteria and assessing the risk associated with the property.
In conclusion, real estate comps benefit a wide range of individuals in the industry. Home buyers and sellers rely on comparables for making informed decisions, while real estate agents, appraisers, and lenders utilize them to provide accurate valuations, guidance, and financing options.
Understanding the significance of actual estate comps in Massachusetts empowers these professionals to navigate the market confidently.
HOW TO FIND REAL ESTATE COMPS FOR MASSACHUSETTS HOMES
Finding real estate comps is essential in determining the accurate value of a property. We will explore different methods to help you find real estate comps effectively.
UTILIZING ONLINE REAL ESTATE PLATFORMS
Online real estate platforms provide a wealth of information and convenient access to recent sales data. Three popular platforms to consider are Redfin, Realtor, and Zillow.
REDFIN, REALTOR, AND ZILLOW: SEARCHING FOR RECENTLY SOLD HOMES
These platforms allow you to search for recently sold homes in your desired neighborhood. You can filter the search results based on various criteria such as location, property size, number of bedrooms and bathrooms, and more. It helps you find comparable properties that closely match the one you are interested in.
MASSACHUSETTS MLS: ACCESSING UP-TO-DATE AND ACCURATE COMP INFORMATION
The MLS (Multiple Listing Service) is a comprehensive database real estate professionals use. Contact a local real estate agent who can provide you with access to the MLS. It offers the most current and accurate comp information, including detailed property descriptions, sale prices, and other relevant data.
CONSULTING PUBLIC PROPERTY RECORDS
Public property records are another valuable resource for finding real estate comps. These records are typically accessible through county or city government websites. They provide information about past sales, including sale prices, property size, and other details. By analyzing these records, you can identify comparable sales in the area.
SEEKING GUIDANCE FROM LOCAL REAL ESTATE AGENTS
Local real estate agents possess comprehensive market knowledge and can be a valuable resource when searching for real estate comps. They have access to exclusive databases and can provide valuable insights based on their experience and expertise. Reach out to a trusted local agent who can assist you in finding accurate and relevant sales data for your property.
Real Estate agents will provide a comparative market analysis determining your property’s market value. There is rarely a charge for this information, as an agent performs this service in hopes of getting your business.
WHAT TO CONSIDER WHEN FINDING REAL ESTATE COMPS
When searching for real estate comps, it’s essential to consider various factors that can significantly impact property value. Understanding these considerations will help you make informed decisions in the real estate market.
LOCATION AND NEIGHBORHOOD FACTORS
Location is a crucial aspect to consider when finding relevant sales information. Factors such as proximity to amenities, schools, transportation, and desirable neighborhoods can significantly affect a property’s value. Additionally, the overall desirability and reputation of the community can play a significant role in determining the comparability of sales.
PROPERTY SPECIFICATIONS AND CHARACTERISTICS
Examining property specifications and characteristics is vital when evaluating real estate comps. Factors such as the size of the house and lot, the number of bedrooms and bathrooms, and any unique features or upgrades can influence a property’s market value. It’s essential to find comps with similar specifications to ensure accurate comparisons.
Trying to use price per square foot is a terrible way to try to establish market value.
SALE DATE AND MARKET TRENDS
Considering the sale date and current market trends is essential for finding relevant real estate comps. Sales within a similar timeframe to the evaluated property provide more accurate comparisons. Additionally, understanding market trends, such as increasing or declining property values, can help assess the validity of sales data and adjust accordingly.
ADJUSTING FOR UNIQUE FEATURES AND IMPROVEMENTS
Real estate comps must be adjusted to account for any unique features or improvements in the appraised property. For example, if a comp has a swimming pool or a recently renovated kitchen, the sales price may be adjusted to reflect those additional features. Properly accounting for these differences ensures accurate valuation and fair market comparisons.
By considering these factors when finding real estate comps, you can gather relevant and accurate data to determine the value of a property in the current market. The hard part for a layperson is understanding the adjustments from one home to the next. This is where an exceptional real estate agent offers their expertise.
FINAL THOUGHTS ON LOCATING COMPS FOR A MASSACHUSETTS HOME
When you want to establish the market value of a property, there is nothing more crucial than accurate, comparable sales data. It takes some Realtors years before they master the art of the right real estate comps and how to adjust the value based on the subject property’s characteristics.
As a buyer or seller, it is essential to know that the pricing and value of homes are somewhat subjective. In most circumstances, the bottom line is knowing a property’s value is what a ready, willing, and able buyer is willing to pay for it.
Contact Marino & Marino, P.C. and speak with professionals to ensure you receive the most accurate comps during your buying or selling journey!