Define: Comps

Comps, short for comparables, refer to recently sold properties that are similar to the subject property in terms of location, size, condition, and features. They are used to determine the fair market value of a property.

Comps are crucial in real estate transactions as they provide an objective basis for determining the value of a property. They help buyers and sellers make informed decisions about pricing, negotiations, and financing.

You can find comps by working with a real estate agent who has access to multiple listing services (MLS) or by using online platforms that provide recent sales data. Additionally, you can consult public records, attend open houses, or hire a professional appraiser.

Ideally, comps should be from the same neighborhood or a similar location to ensure accurate valuation. However, in some cases, if there are no recent sales in the subject property’s neighborhood, comparable sales from nearby areas may be considered.

Comps should ideally be recent, typically within the past six months, to reflect the current market conditions accurately. However, if there are no recent sales available, older comps may be used, but adjustments for market changes may be necessary.

Ideally, comps should be of the same property type (e.g., single-family homes, condos, townhouses) to ensure accurate valuation. However, if there are no recent sales of the same property type, adjustments can be made based on the differences in features and market demand.

If you believe that the appraiser has used inaccurate or inappropriate comps, you can provide additional information or evidence to support your claim. However, challenging comps can be complex, and it is advisable to consult with a real estate attorney or expert for guidance.

While comps are an essential factor in determining a property’s value, other factors such as market conditions, location desirability, property condition, and unique features also play a role. Appraisers consider a combination of these factors to arrive at a final valuation.

Yes, comps can be used by sellers to determine the listing price of their property. By analyzing recent sales of similar properties in the area, sellers can get an idea of the market value and set a competitive price that attracts potential buyers.