Homes are unlike the majority of things that people buy in that the price is never set in stone. Of course, a listing will include an “asking price” but as the term suggests, this is just a request rather than a hard, unwavering demand. This is why comps are so important. So what exactly are comps?
Short for “comparables”, comps are a way to help you figure out what a home is worth based on recent sales of similar properties in the area. Real estate agents and sellers use comps to help them come up with their asking price, while buyers can using comps to come up with how much to offer. This is an important concept for both buyers and sellers to master.
What Comps Should I Choose?
With housing comps, you ideally want to compare apples to apples – not apples to oranges. In other words, it is important for comps to be as similar to your own property as possible. Here are some key items you should look for when selecting your comps…
- Same Location
- Same Size
- Number of Bedrooms/Bathrooms
- Recent Sales Price
- Style, View & Other Details
How Can I Find Comps?
In order to get all of the information you will need for your comps, you will want to enlist the help of a real estate agent. While you can search recent sales on many websites such as Realtor.com and Zillow on your own, a real estate agent has access to the Multiple Listing Service also known as the MLS. Along with having all of the detailed information on the recent home sales, an agent can help you turn all of this information into an asking price or into an offer that you can justify and stand by. This will be extremely important once the negotiation process begins.
Keep in mind, comps are more of an art than a science which is why many different professionals may use them to come to different conclusions. Regardless, comps can help you to back up whatever you are asking for or offering, strengthening your negotiation position, and saving you a lot of money.
For any questions regarding buying or selling a home, call us today at 614.855.8700!