Having a credible method for conducting market research will help justify offers and listing prices on properties. The right process can also make your research run smoothly and more efficiently. Investors should always start by looking at properties that have recently sold.
Currently, properties are typically not the most accurate representation of property value on the market, as they could be over or underpriced to sell. It is also smart to drive by the locations of certain properties to get a better idea of the area and surrounding amenities both taken into consideration when setting a list price.
Investors also need to be careful to study the listing photos presented on the MLS. These should reveal the types of appliances, flooring, and fixtures that homebuyers might expect at that price point. Real estate professionals should keep a few other factors in mind when running comps on the MLS. Below you will find an overview of what to look for when conducting a competitive market analysis:. Size up the neighborhood: Location is a key variable used to determine property value, as neighborhood desirability and attractiveness tend to have a strong correlation with listing prices.
This information will become useful in the next step: finding comparable properties. Start pulling MLS comps: This is the step where you will need the help of a real estate agent. Upon logging into the MLS, the agent will look for properties that have been recently sold, or have sales pending, in the same neighborhood. They will then narrow down the search criteria to properties with features as close as possible to the list of features identified in the previous step.
This can include square footage, number of bedrooms and baths, age, and lot size. Calculate price per square foot: Once several MLS comps have been pulled, the average price per square foot can be calculated. This can be done by dividing the sale price by the square footage for each comp and then finding the average between all comps.
Click here for further instructions on how to calculate square footage for your property. After crunching these numbers, the average price per square foot can be multiplied by the total square footage of the property in question. The resulting number provides the approximate value for your listing based on neighborhood comparisons.
You can use this example to practice estimating your average price per square foot. Appraise property condition: Once you have calculated the initial property value, be sure to take into consideration aspects such as any issues with the property, as well as any special features or upgrades that have been made that were difficult to compare. Set your listing price: Now that extensive research has been conducted, it is time to set your listing price for your property.
This step should take several factors into consideration, such as the local market, property features, and value estimate. In addition, the listing price should reflect how your property sizes up to the competition. At the end of the day, sellers should feel confident about their listing price if the decision is backed up by solid research using accurate data. In fact, I would advise against anything less than a detailed spreadsheet.
Whether you are estimating the value of a potential deal or trying to determine a listing price on an existing property, accuracy is crucial when looking at comps. Start a new spreadsheet using Google Sheets or Microsoft Excel.
Place the property address you are using as a baseline in one column, with others to follow. Then organize your spreadsheet with the following rows:. The above information is a great starting point when analyzing comparable properties, and the side-by-side format will allow you to compare relevant information directly. You can add additional rows for property descriptions, tax values, and more as you see fit. I recommend walking through an example yourself and then saving the file as a template for future use.
If you want a more visual example, try checking out the examples provided by SampleTemplates or The Balance. If you do not have access to the MLS, there are still several options for accessing comparable properties. In fact, many free public websites use data from the MLS and have several search features that are helpful when researching a given area.
Consider the following websites next time you look for house comps:. Zillow: Zillow has great features for estimating property value and list price, but this website is also a good resource when searching for comps. Zillow allows investors to search for properties by price, bedroom, type and more making this a great tool for identifying similar homes. While recent listings are the most helpful when searching for comps, the added information can be helpful to investors who have trouble finding similar properties.
Trulia: Trulia can provide investors with detailed information on properties based on property type, purchase price, date sold and more. Investors can also navigate a map to find properties in nearby neighborhoods. Property Shark: This is yet another tool with information on recently sold properties within an area.
One of the best parts is that it does not require investors to input any contact information when searching for properties, making it easier than ever to do a quick search on a neighborhood. Real estate prices are based on several factors, including supply, demand, location, condition, and property features and amenities.
Because these values can be relative and ever-changing, comparable properties on the MLS are a respected method for setting fair and competitive list prices. Buyers can even use comparable properties as they determine the correct offer price for a home. Overall, real estate comps are a valuable resource for real estate professionals no matter which side of a deal they are on.
Key Takeaways What are real estate comps? Why use MLS comps? How to find comps Free real estate comps Have you ever wondered just how sellers set list prices on their properties?
Real Estate Investing Strategies. See All. Urban Vs. Even seemingly small discrepancies like stainless steel appliances versus older white appliances can add up. In addition to looking at the pictures, you should always read the listing description. Not every improvement or upgrade is visible in pictures. Note things like cracks in the driveway or missing shingles. The condition of the exterior should give you some insights into the condition of the interior.
Is it on a cul-de-sac instead of a busy road? Is it near a bus or train line? When researching comps, take careful notes. Capture as much information as you can, as soon as you find a promising comp. Combine MLS comps from recently sold homes with online data from sites like Zillow and insights from your real estate agent, if you have one. How accurate is your Zestimate? Zillow has a nationwide median error rate of 1. Where your Zestimate falls on this spectrum highly depends on what public data about your home and comparable homes in your area is available.
Some counties and cities have more detailed public information available compared to others. Doing so can even influence your Zestimate and make it even more accurate. We already mentioned that for accuracy, you should only reference comps from the last few months. Another reason this is important is seasonality.
Whether prices vary dramatically by season depends on your local real estate market, but in general, homes sell more quickly in spring and early summer , and they take longer to sell in the winter.
Sellers often try to motivate buyers in slower seasons with a lower sale price, so keep seasonality in mind as you price your home.
Message and data rates apply. I agree to receive a one-time text message containing a link to download the Zillow 3D Home app at the mobile number I provide above, and I confirm that the mobile number is mine.
An iPhone 7 or newer is needed to use the app. The Cost to Stage a Home. This browser is no longer supported. Please switch to a supported browser or download one of our Mobile Apps. See Mobile Apps. Menu subnav-close Search subnav-close. However, by following the same guidelines, you can estimate that cost and get fairly close. For more information on the methods used by appraisers to determining house values, see What Is Market Value.
The method of using a comparable market analysis, as discussed above, has begun to see competition from several online technologies that are making it easier to determine an estimate for your house value. As technology improves, the tools we use to find the value of a property get better and better. Finding comps comparable data is now as easy as entering your address into a form.
Redfin — An online brokerage with online property valuation tool. Property Shark — Property Shark provides public data on a property, recent sales, sale history, and comparables. No need to provide your contact info, either.
Home Smart Reports Home Smart Reports offers a pay house value engine including property information, nearby sales with map, and a neighborhood summary, as well as a much more advanced report with risk analysis, many more comps, and other statistical charts.
0コメント