Whether you are deciding how to price your home to sell it or waiting for an appraisal to be complete – you’re going to hear the word “comp” thrown around. But – what is a comp?
What is a comp?
A comp is a comparable home to yours that has sold in the last six to twelve months.
Wouldn’t all houses nearby be considered a comp?
Nope. Agents and appraisers are looking for a home that is similar in size, construction, condition.
We wouldn’t compare your house to the neighbor next door if theirs hasn’t been updated since the 70’s and yours is fully renovated.
Wouldn’t you just look at the price per square foot in the area?
The old idea that your home should be valued by price per square foot just doesn’t work in this situation. Our housing inventory is so unique and your house could be worth more!
Using the example above about your neighbor’s house being outdated and yours is updated – would you price these houses in the same way? I sure hope not!
My neighbor sold their place 2 years ago. Is that a comp?
No, it is not. Appraisers and agents like to look at the most recent sales, going back 6 months. If there are few sales in your area, then we will go back a full year.
In our real estate market, it would be very rare to look at any sales that date back further than a year.
What if I have a unique home to the neighborhood?
If you have a truly different home than what is offered in the area, that is when we would look at comparables in other similar neighborhoods.
Should I get an appraisal before I list my house?
If we are challenged by finding a great comp for your house – then yes, we would then suggest getting an appraisal done.
FYI: Not all appraisers will use the same comps and later down the line, your appraisal may come in at a different price. A pre-listing appraisal is for guidance and is not the end-all, be-all when it comes to value.
Should I look at comps when purchasing?
You betcha. Your real estate agent should pull comps in the area to see if the home is overpriced or underpriced.
Whether we are representing you as the buyer or the seller, we are happy to sort through the comps with you and show you how we landed on a price. But, please note, at the end of the day it’s your decision on what price to list your house and what offer you want to make. We are here to guide you with our knowledge and experience in the real estate market.
Let’s look at some comps! Text us now!