When determining the value of single family homes, real estate agents usually look at three comparable sales, known in the industry as “comps.” Both agents and appraisers have access to the Multiple Listing Service (MLS) to look at pending and sold single family home transactions within a certain radius of the property in question. If you are not a real estate agent or appraiser, you will not have access to this. But an agent will usually be happy to provide you with comparables for free. So why are comps so important? Let’s take a look at why.
Helps Homes Get Appraised
When looking at the sale price of other homes in the area, an appraiser can determine the value of a home. Appraisers look at similar homes with comparable features that have been sold within the area. This helps them determine the value of a home.
Prices are More Accurate
By comparing similar home sales, a more accurate price can be determined when it comes time to sell. Similar to appraisers, sellers can compare multiple properties that have been sold in the area with similar features to obtain an accurate sale price.
Determines Prices of Extras
Comps also help you determine the pricing difference of extras such as kitchen remodels or pools. For example, you can compare the house with a pool to similar single family homes without a pool. The same principle applies to garages, hot tubs, decks, gazebos and other add-ons. Any type of extra including differences in lot sizes and price per square foot can be determined in this way.
For more information on comps or to inquire about buying or selling a single family home, contact me, Big Mike, today at 480-720-0730. I will help you with your real estate transaction from start to finish and provide that down home service you would expect from your real estate agent.
