Whenever you invest in a property, there are so many things to look after! The appraiser or San Antonio realtor will look into the comparable sales which are also known as real estate comps. They then research the property values that are currently on the market and also look into the properties sold in the past for coming up with a proper value for your investment property. In this article, we will be discussing everything you need to know about real estate comps.
Typically, the key to determine the market value of your investment property is through real estate comps. This can be done by comparing homes that are similar to yours in size, location, and condition. The basic psychology of real estate comps is to find out the market value of your property. This is done by finding out what others may be willing to pay or may have paid for similar properties in the past. Real estate comps are considered to be the best tools to determine the worth of your investment, even if you change your mind about buying a house, it is good to stay updated.
By analyzing these real estate comps, you get to determine how your property differs from other similar properties in your neighborhood and then calculate how the differences will affect the sale price of your property. This will allow you to adjust the sales price of the comps in order to figure out how much less or more your property should cost. But, for getting a reliable estimate of your property’s value, at least three or four different comps must be taken into consideration.
How can you find the real estate comps in your area?
One of the most ideal ways of finding real estate comps in your area or neighborhood is to explore the local multiple listing services, also known as the MLS. MLS serves to be a database widely used by top realtors in San Antonio to list the houses for sale. Through MLS, you can get extensive information on the houses that are currently on the market and also the ones that have already been sold. It enables you to explore the properties that are recently stored and gives you the information on whether those properties are similar to yours to be considered as a comp.
However, you must note that these MLS can only be accessed with licensed real estate agents. Therefore, if you are on the hunt for the best and extremely accurate comps for the properties you are interested to purchase or sell, working with a licensed realtor in San Antonio is the only option.
Who all use Real Estate Comps?
Every party involved in real estate transactions uses real estate comps. Let us briefly look into all the parties who avail benefits from the information that the real estate comps provide –
Appraisers:
In order to determine the value of the property, appraisers inspect the property thoroughly. They then review the public records, and source for real estate comps through Multiple Listing Services. By reviewing these comps, the appraisers get to determine what the buyers will be willing to pay for the recently sold similar homes of that area or neighborhood. This can be paramount to assess the home’s current fair market value.
Home Buyers:
Real estate comps serve as a very useful resource for the homebuyer as they can determine how much the other buyers have been willing to pay for similar recently sold properties. Once they find a home that they are interested in, they check out for the comps in their desired neighborhood. This helps them to get an idea of the offer that they should make. Once the buyers know how much other buyers have paid in the last few months, they will be assured that they do not pay more than the actual worth of the home. It also enables them to avoid making any lowball offer that the seller may reject. By using this knowledge from the real estate comps, buyers get to negotiate for seller concessions or a lower price for the property.
Home Sellers:
Real estate comps are extremely essential for home sellers, especially for the ones taking the FSBO route. Sellers often struggle to keep their emotions in control that clouds their judgment when deciding the listing price for their property. Sellers who do not know about pricing their property right often tend to set unrealistic expectations regarding their home’s worth. Hence, real estate comps are very important for them. Once they analyze the comparable sales price, they get a more objective way of setting the price of their property when listing.
Real estate comps provide a window into the fair market value of every house. Thus, the sellers get to know what they can expect from their property and be assured that their house will sell faster. Comps can be a key tool for sellers when making counteroffers. If any homebuyers make lowball offers, sellers can use these comps as proof as to why their home is worth more money.
Real Estate Agents:
Real estate agents rely on Multiple Listing Services to find comps and use this information to run a comparative market analysis. CMA is a report prepared by the agent which compares the home to other similar properties recently sold in the market. They give this to the buyers and the sellers to help them get an estimate of the fair market price value of their property.
The CMA report helps the buyers and the sellers to make informed decisions about the piece value of the specific house.
Why is it best to consult a real estate agent when looking at comps?
While a lot of information is available on the web, a real estate agent knows all the tricks related to the real estate market, comps included. They have the access to the most accurate information and possess deep knowledge and skill to perform a comprehensive CMA and set an appropriate price for your property. Hence, it is highly recommended that you avail of the services of your San Antonio realtor when you want to use real estate comp to estimate the fair market value of your property.
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The Bottom line
Real estate comps serve as a very important tool in determining the fair market value of your property. Once you know all the information about the recently sold homes in your area, you can determine how much you should pay for your desired property if you are a home buyer. If you are a home seller, you get a fair idea of your property’s fair market worth when you set the listing price.
While you can find comps on your own, it is advisable to work with top realtors in San Antonio. They will help you complete the calculations and arrive at the most appropriate price to buy or sell your house.
