Comparable sales are used to estimate pricing on real estate for many reasons. The value of properties recently sold and those properties of similar structure and size are used to estimate the value of the current piece of real estate. This gives the property owner and the buyer of it an idea of its real worth. These comparable sales basics can be enhanced in many ways.
By using comparable real estate sales, real estate agents and other professionals can produce a very good picture of the value of the property. This is part of the formula used by appraisers to determine the value of real estate as well. When using this information, keep the following in mind:
1. Determine comparable home sales within the right region, since the area of comparison should be close.
2. Invest in comparable sales data that is as up to date as possible.
3. Learn about comparable properties through a variety of sources.
Use comparable property sales information from public recordsPublic records are a free real estate comparables tool that can be accessed by the general public. Use the deeds filed with municipalities or the local county recorder's office. The only downside to using this information is that it can be six-to-eight-weeks behind the current market, making it less accurate for rapidly changing markets.
Find comp sales from the Multiple Listing ServiceReal estate comparable sales are available through the Multiple Listing Service, or MLS. Generally, this is a real estate agent's resource for locating properties for sale, but it can also be used by the public through a variety of websites. The key is to find the selling price posted on the MLS just after the property sale is complete. This information remains posted for several months or longer.
Utilize pending sales for comparative sales analysisThe most accurate and most current information available for comparable home sale prices comes from pending home sales. These are properties that are just selling. This information is rarely available to the public, so hiring a real estate agent is necessary to use this information to price real estate.
- When using comparable sales in the public record, keep in mind that any changes to the property have likely not been updated. New additions, structural changes and even remodeling is not always recorded.