http://www.REIClub.com – Having Accurate Real Estate Comps Will Save You Money. Here Are A Few Tips on How To Pull Accurate Real Estate Comparables…
Hi, this is Frank Chen with REIClub.com, the only site you need as a real estate investor. Today I’ve got a quick video on how to pull accurate real estate comps for properties you are trying to sell.
Importance of accurate real estate values?
Comps, or comparables, are regarded as one of the single-best tools in determining a home’s value. and sadly, that being said, not many investors know how to do it correctly.
Its a common mistake for real estate investors to focus on one resource to pull their comps, whether it be a realtor, Zillow, Trulia, it’s important for you to remember these are just references.
– over-evaluate – YOU over-pay
– under-evaluate – YOU lose money
You still have to consider:
– condition of your home
– condition of competition
– bought and sold in the last 90-180 days
– type of real estate – lease option, short sale, wholesale, etc
Real Estate Comps For Sale Properties
– Local tax appraisal – good free reference
– Service Companies – paid websites – send you reports
– Court House searches – disclosures – texas = non-disclosure
– Newspaper Listings – sometimes
– Master the Area – Familiarize yourself with a specific zip code, or mapsco area.
– Call owners of other properties for sale in area
– properties bought and sold in the past 90-180 days (Zip)
– same criteria
– Property type – house vs. duplex
– same neighborhood – adjacent streets can differ in value quite a bit
– $$$/sq. foot – compared to average of comps
– # of beds and bath
– age and style of home – 1 or 2 stories
– condition of home
– lot size – backyard
– amenities – pool, storage house, etc..
– looking for average values – mls automatically does this
– drive-by – if a competing property is similar in almost every way, but differs in price, you should
check it out in person to see why
– the yard – landscaping
– exterior – paint and general repair
– traffic and noise – by a street or not
– garage or covered
Note: Beware of comps pulled by some realtors. Unless you tell them exactly what you are looking for they may pull comps that benefit them more than you.
Calculating Sales Price:
After removing all inaccurate comps, take the remaining properties, average their $/sq.ft and multiply that number by the total sq.ft of the property you are interested in. This will be a good starting baseline. You might need to adjust based on your assessments of other ‘for sale’ properties in the area.
– Zillow.com – not very accurate
– Yahoo Real Estate
– Loopnet.com – commercial
Before any real estate transaction, you must be able to pull accurate real estate comps. This is how you avoid the common mistakes most first-time real estate investors make. Real Estate values change all the time, what may have been 3 month ago may not be the same today. Before making a high dollar investment it’s important that you utilize all the free resources out there. Get your numbers straight, because you really can’t afford too many mistakes.
Again, this is Frank Chen with REIClub.com. Please take the time to leave your comments for this video below and please subscribe to our YouTube channel so you’ll be automatically notified when we upload more quick video tips for you. Take care and good investing.