Did you know that over 5 million homes were sold last year? The real estate industry market has heated up recently and shows no signs of cooling down. With so much competition, it’s important to understand it before diving into the world of buying or selling homes. Comparable Sales in Real Estate discuss below
When it comes to house value, real estate comps play a significant part. If you are thinking about getting into the market, this is the perfect place to start. Check out this explanation about what comparable sales mean in real estate here.
What Are Comparable Sales?
First things first: what are comparable home sales in real estate? Often referred to as “comps” in the industry, they are the sale prices of recently sold homes that are similar to a specific house type–whether it is one you are trying to buy or sell. This procedure will help give a picture of the current market in one area.
Why Are Comps Important?
The purpose of comparable sales is to help establish a fair market value for a home. While an appraisal is also a useful tool for doing this, it is based on the opinion of one professional. Sometimes real estate comps can paint a more accurate picture since it is based on real numbers and sales in real estate during a specific time period.
How Are Comps Measured?
The comparable sales approach is taken by looking at a few factors, like the time frame of sales, proximity to the home in question, and lot size. In terms of the house itself, the square footage, number of bedrooms, and bathrooms will also be compared. Other points of note may be the age and condition of the house.
Home Valuation Reports
If you were wondering what is my home worth you can always reach out to a licensed real estate broker to do a home valuation report. Whether it is about the value of your home or the fair market value of potential homes to purchase, many are happy to assist you with a free market analysis.
While comps are a critical part of the real estate process, it is important to note that the market is changing all the time and that comps are not the final word on a home’s value. Prices rise and fall not only with the seasons but with supply and demand, so be sure to set realistic expectations and be flexible when buying or selling a home.
Learn More About Real Estate
If you were wondering, what are comps in real estate, now you know! And since you’ve learned about comparable sales in real estate and their importance in establishing a fair market value for a home, you can continue your real estate journey with confidence. By looking at homes that have similar lot sizes, square footage, bedrooms, and bathrooms, as well as the age and condition you can determine a more accurate assessment.
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