Sales comparable reports, also known as the market analysis approach, are an important tool in real estate. These reports help individuals and realtors estimate an appropriate sale price for a property. When looking to list a home, it is wise to use this method before determining a starting number. Real estate agents can also take advantage of these helpful reports.
Getting a Sales Comparable Report
These reports are a way to compare the listed home with similar recently sold homes. Size, location, and amenities determine similarity. The examiner looks at the sale prices of properties that are similar to the one the buyer wants to purchase. This helps narrow down what the given home is worth in the present market. Appraisers generally begin with 10 or so comparable properties and then pare down the list to about five properties that seem to have the strongest correlations. These are used in the final comparison.
It is rare to find homes that are identical to the one a purchaser is considering. Though comparable reports are amazing starting points, the individual handling the appraisal must make adjustments. This is where a realtor’s skill and experience comes in. Realtors make common price adjustments for:
- When there are no homes with matching numbers of bedrooms to compare, the realtor must decide what the bedroom is worth.
- The age of the construction is a large factor in determining price. Even with renovations, it plays a part. The realtor must calculate the dollar value of the age difference in these instances.
- This can be rather complicated to determine. If all comparable sales occurred during a different phase of the housing economy, the realtor must account for this. As an example, if the exact same house sold two years earlier when the housing market was booming, the price will not be the same if there is a crash. Recent property sales would include a window of three to six months.
These are just the most common examples of adjustments. Others include neighborhood, school districts, access to mass transit, and amenities such as pools. Though real estate agents have been employing this technique for a long time, individuals have also adopted it in recent years.
Run a Market Analysis
When real estate agents and appraisers run these reports, they do so with the use of the Multiple Listing Service. People outside the industry generally have a more difficult time accessing these resources. However, there are options to become familiar with how the seller is pricing the property.
If this is an individual effort, there are other ways to glean this information. Companies have jumped on the growing desire for people to run their own comparisons. The result is a host of online tools regular people can use. CourthouseDirect.com, has an option to view sales comparables
As always, it is worth noting that these sites will request the listed address. Use reputable websites. Giving an unknown company an address and move date is not advisable. Keep in mind that the available to professional agents are the most accurate. If you are trying to do it yourself, consult a few sites. They will each likely produce different results. It is best to attain a spread and then average out.
Remember That Comparables Are Key
Prior to listing a property, always run a comparables report. This analysis provides information that no other source can. Professional agents still have the best access to solid information as well as the knowledge to make price adjustments properly. This is valuable information, and you should always consider it when buying or selling a home.