How to Research Residential Comps
When attempting to derive the value of a target property, real estate comparables (comps) are extremely important. It's easy to simply look at a home and take a guess at its value, but you may be surprised how far off your number may be. Factors like location, school systems, amenities and structural condition are only a few of the things that go into determining the value of a home. Whether you want to put your home on the market or are just looking to get an idea of what your property is worth, there are several approaches you can take to accurately estimate its value.
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Instructions
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Attend open houses. Investigate other homes in the area, particularly those that are for sale. Many homes on the market entertain open houses on Sunday afternoons. Keep a lookout for signs and newspaper listings promoting these showings. Particularly focus on homes that are of similar size and style to yours. Expand to neighboring towns if you need to. By touring competing homes, you can help understand what options are out there for potential buyers.
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Visit your local courthouse. Depending on what state you reside in, you may have difficulty obtaining property sales information. For those who live in disclosure states, information on sales can be found at the courthouse. If you're willing to spend the time, this is a beneficial way to learn the history of a target property.
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Put your Internet search skills to work. There is a wealth of information online providing real estate listings and sales information. Popular websites like Zillow.com, Trulia.com and Cyberhomes.com can instantly provide you with an estimated value of your home. Simply enter your address into the search bar and you will be provided a value of what your home is worth compared to other homes in the area that have either recently sold or are still on the market.
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Hire an appraiser. Certified appraisers are specially trained to estimate the value of property. Obtaining a real estate appraisal is an effective way to document fair market value of your home. An appraiser will not just base their estimate on comparable homes in the area but also take your homes updates and improvements into consideration. It's important that your appraiser possess a license with the State Real Estate Commission to perform such appraisals. Also consider their experience and knowledge about the local market and property type.
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Get access to MLS. Having access to Realtor's proprietary information that is available in the Multiple Listing Service (MLS) is invaluable. Regardless of which comparable methodology you plan to use, this is an excellent resource to consult. However, not just anyone may be granted access. In most cases, this service is strictly limited to those who have a real estate license. The best way to work around this is to contact those who have access. For example, a Realtor, appraiser or title company. Building relationships with real estate agents and other professionals who have access to MLS is an effective way to get comps. This method requires some effort, but as the relationship grows and the Realtor is fairly compensated for time spent, you will find you've established a valuable connection.
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