June 17, 2021 June 21, 2021 by Hannah Tan
Updated on June 21st, 2021
Whether you’re selling your first home or you’re a first-time homebuyer, finding comparable sales of homes in your area is much easier than it was even ten years ago. Back then, it wasn’t easy to find publicly available data online – you needed the help of an inside connection like a real estate agent or home appraiser to pull comparable sales off of the MLS (multiple listing service). Today there’s much more information available to the public, and you can now access comps with an online search. Let’s explore how to find real estate comps for your area.
What are real estate comps?
When you start researching for real estate comps in your area, it helps to understand what comps are and what information they can tell you. Real estate comps, also referred to as “closed comparable sales,” are completed home sale transactions that have taken place within a specific area and where the homes share similar characteristics with the home you’re selling or considering for purchase. However, you should be aware that a home in Vancouver, BC will list for a different price than an exact replica of the same home listed in Birmingham, AL. Although they are the same house, just listed for sale in different geographical areas, the value of each home is largely influenced by individual housing market conditions.
5 Ways to Find Real Estate Comps in Your Area
When searching for local comps, the first rule of thumb is to find three or more similar properties to ensure that any comparable property isn’t an outlier in price. For example, one home comp in your area may be lower than what you should list your home for sale because it was in poor condition and needed work, or another property may have a high comp because it was the best house on the block. Having at least three property comparables should give you an average price point to start with. Here are five easy ways to get those real estate comps.
1. Use a reputable real estate website to find local comps
Comps are an essential part of listing your home and the home appraisal process. One way to find comps in your area is to use an established real estate listing website for your research. Redfin offers an easy way to identify recently sold homes in your neighborhood quickly.
If you know the address of a recently sold property in your area, you can simply enter the property address in the search bar see all public information about the home, including what the home last sold for.
Scrolling down slightly on the same page will also show the most recently sold homes in the same neighborhood. If you scroll down even further to the bottom of the page, you’ll see a heading titled “Nearby Recently Sold Homes,” and a “View More Recently Sold Homes” button right below. Clicking on this button will bring you to a map populated with homes sold in your area, and you’ll be able to see details like sold price, the number of bedrooms and baths, square footage, price per square foot, and how many days the home was on the market before it sold.
Alternatively, you can view sold properties by searching for your city in the search bar of Redfin’s website. For example, to see comps for a home in Cleveland, OH, type in your city name into the search bar.
- Click on “More Filters.”
- Scroll slightly down and under “Listing Status,” click the toggle that says “For Sale.” This will effectively replace homes for sale with sold homes in your search area.
For a better picture of recent home sales and what you can consider as real estate comps in your area, you can narrow down your search further by restricting the time frame to a specific month and then setting the filters to see recently sold homes that most closely resembles your home. Such as:
- The number of bedrooms
- The number of bathrooms
- If your home is a house, condo, multi-family, etc.
- Square footage of your home
- Your lot size
- Year built
- And HOA fees, if they apply
You can even go more in-depth and identify specific amenities or home trends that could increase the value of your home, such as being a waterfront property or having a view. Keep in mind that if you get too specific in your searches, you might not find enough recently sold homes in your area that you can use as reliable comps. Here’s an example of how you can filter for real estate comps based on a three-bedroom house with two bathrooms and which were sold within the last month.
Recent data is the most useful, so start with one month to see what pops up, then widen your time frame to transactions completed in the past three or six months. In a busy seller’s market, you can even look to see comps in your area within the past week. Once you’ve nailed down your search criteria, you can zoom in on the map and look at all the recently sold homes in your neighborhood and find the ones that are the most comparable to yours.
This is valuable information whether you’re buying or selling a house. From here, you’ll be able to estimate a reasonable starting price that reflects the current housing market. While this method doesn’t necessarily include other variables that could impact your home’s value, such as its current condition, or if there have been any property improvements like a new kitchen or deck, it can be a good way to get an idea of what you can expect.
2. Use an online home valuation tool
Another valuable tool when searching for real estate comps is a home valuation tool to help you understand what your home is worth and provide a good starting point to determine the fair market value. Because Redfin uses complete MLS data on recently sold homes in your area, we offer a couple of different ways to access an online home valuation.*
- Instant home-value estimate and free home report: This a fast way and easy way to see what your home can sell for. Simply type in your address, and instantly see Redfin’s estimate for your home based on recent home sales in your area. It’ll even show you comps in your area just below the estimate.
- A professional estimate prepared by a Redfin Agent: This is a free, no-obligation property estimate prepared by a Redfin agent that knows the housing market in your area. Though you won’t get the estimate back instantaneously, you’ll receive an estimate within an hour that’s more comprehensive.
*These estimates are not intended as an appraisal and are not a substitute for the services of a professional, licensed appraiser.
3. Ask your real estate agent to procure MLS comps
One sure-fire way to get accurate real estate comps is to work with a local real estate agent. Local real estate agents are experts in their market and can give you sound advice on how to price your property, as well as help you understand data in MLS comps. Only licensed agents have access to the MLS, which is the most up-to-date and accurate tool available.
Real estate agents pull comps from the MLS in their daily work to provide clients with a reliable price range when listing a home for sale. For example, agents know if properties have likely increased in value, if the fair market value is accurate, or if a property’s price is out of line with other homes in the area.
4. Research public property records
Another valuable resource for homebuyers and sellers is your county’s public property records. Unfortunately, public property records can be a hit or miss when it comes to comps, as you’ll only be able to find the last recorded sales price, which may be from ten years ago. So if the area market has few or no recent transactions, you could be stuck with property comps that don’t reflect today’s market conditions. Public property records can be a good place to start, but you’ll need additional research to find accurate numbers.
Most counties allow you to search property records online at no cost – although you may need to pay for printed documentation. Visit your county or city website and search for “property records.” The house’s street address should allow you access to property tax information that will show the last sold price and the current taxes.
5. Request a comparative market analysis (CMA)
Real estate agents and brokers use CMAs* to give sellers all the details they need before listing a house for sale. Finding the listing price sweet spot is essential to a quick sale. The best listing price is the one that’s not too low where you end up leaving money on the table or not too high where the home doesn’t sell at all. And for buyers, a CMA can help verify if a home is a good deal and pinpoint a competitive offer that will be taken seriously—without going overboard.
A CMA also provides the most accurate data and details about the home and surrounding area. However, an agent’s CMA is more than just the numbers. The agent provides expert advice to help you assess the home, the current market, prices, and other factors that could affect your list price.
Many real estate agents and brokers have software they use to generate comprehensive CMA reports. If you’re creating your own report, it would be best to use a spreadsheet to keep track of your research.
A typical CMA will include:
- The address of the property and three to five comps in the area
- Description of each comparable property, including elevation, floor plan, and the number of bedrooms and bathrooms
- The square footage of each property
- The sales price of each comparable property
- Dollar adjustments will be made for any differences
- The adjusted sold price per square foot of each comp
*This is not intended as an appraisal and is not a substitute for the services of a professional, licensed appraiser.
How do I use comps to price my home?
Real estate comps help you price your home accurately by giving you a range for its “fair market value” based on recent market activity. Then you can add or subtract from the fair market price based on the home’s condition, special features, and other characteristics that buyers will likely consider.
What goes into a comps analysis?
To be considered a comparable property, a property should ideally match your house in:
Location: Location matters. In some areas, a property’s value can change from neighborhood to neighborhood, from block to block, or even within 100 yards. Start by looking for comps within a 1-mile radius and move out to 5 miles if necessary. Expert knowledge can help you understand nuances in a neighborhood, so take your time or ask an agent to help you.
Neighborhood: Real estate comps should have the same neighborhood features, such as distance to schools, stores, hospitals, waterfronts, parks, and views. Also, keep in mind access to public transportation and walkability.
Year built: Consider houses built within a 5-year range of your home being built. It’s often assumed that an older home needs work and hasn’t been updated. While this isn’t always the case, a newer home will initially have a higher fair market value.
Size of the home: Square footage plays a significant role in comparing home values. After all, if one home has 1000 square feet and another 2000 square feet, you are buying a larger home, and it should cost more to purchase. Square footage will raise or lower the value of the real estate comps you’re looking at. The best comps for you will be properties that are comparable to yours.
Layout: If the home has a strange layout or is partitioned into smaller, separate rooms, it can bring down the value and the sales price.
Price per square foot: Calculate the price per square foot by dividing the home’s sale price by its square footage. Price per square foot is always a good yardstick for neighborhood comparisons.
The number of beds and baths: A home’s value typically increases when there are more bedrooms and bathrooms. This translates into a higher sales price and considering higher comps.
Condition: If the house was in disrepair and needed a lot of work and investment to make it livable, the price the home last sold for may reflect a fixer-upper. However, on the surface, these deals would show up in comps the same as if the house was move-in ready. It’s important to dig further to see what any unusually high or low sales prices might reflect and help put these comps in perspective.
Upgrades and renovations: When a homeowner updates a bathroom or renovates a kitchen, their home value typically increases. Consider any renovations or upgrades you see in your real estate comps and how those compare to your home’s features. Does your home have a new kitchen or a deck that needs fixing? Either of these will undoubtedly have an impact on your home’s value.
Timeframe of when the comps sold: Focus on homes that have been sold within a 3- to 6-month period. In a hot market that favors the seller, you may want to focus on an even shorter timeframe.
Who uses real estate comps?
Real estate agents and brokers use real estate comps every day to do their jobs. An agent or broker will use comps to suggest a listing price for a home that’s about to go to market and represents a fair market price. Agents also have access to any pending sales, which would affect real estate comps and CMA reports. The sales volume in your area will also drive the fair market price on any home being listed for sale. For example, if your housing market is currently a seller’s market and homes are selling quickly, buyers may be making higher offers than they would be in a market that’s not so competitive.
Understanding real estate comparables and the state of the market in your local area is essential. It can help you make an informed decision about buying or selling a property.
Home sellers use comps to understand what similar homes in the area are selling for, allowing them to set a list price they feel confident in. Comps also help home sellers clarify their home’s selling points which will be highlighted in the home’s description when it’s listed for sale.
Homebuyers use accurate real estate comps for making an offer. By researching similar properties in the area, buyers can verify that the listing price is fair, or if the price is too high or low. Comps are also helpful in creating a strategy for negotiating a home sale.
Home appraisers perform home appraisals as one of the most important steps to completing the sale of a home. First, the buyer’s mortgage lender usually initiates an appraisal. Next, they call a professional appraiser to determine the value of the house in question. The appraiser relies on real estate comps and several other factors in determining an accurate property value that can make or break a sale. The cost of the home appraisal will be covered by the homebuyer.
Finding and analyzing comps can be tricky. However, you can always work with a local real estate agent or broker with expertise in your market. They can help you nail down a good price to list your home.
Are you curious how much you can make from selling your home? Check out Redfin’s home sale calculator to see what your estimated home sale proceeds could be.
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