How important are real estate comps?
The dominant reason why comps are so important is pricing. Appraisers provide market value information to lenders. … Appraisers and agents want a good supply of comps in order to select the best. Both professionals have reason to find good comps, so it’s in the buyer and seller’s best interest to trust their assessment.
How do comps work in real estate?
In short, finding comps involves looking for recent sales of houses as much like your own property as possible, then comparing your home to them and adjusting your price to account for the differences.
How far do appraisers look for comps?
Comps should ideally be within one mile of the subject property, and not over any major barriers like a freeway, a river or railroad tracks.
How long are house comps good for?
It’s not that old houses can’t be nice, it’s just that they’re less likely to be in a good of condition as a recently built one. The recommended age range for comps is 5 years.
How do comps affect appraisals?
When valuing a home, an appraiser collects data on the sale prices of similar homes to help develop a credible opinion of value. Generally speaking, comps that have sold most recently and are most similar in location and physical characteristics to the subject property are selected for further analysis.
How accurate is zestimate?
How Accurate is Zestimate? According to Zillow’s Zestimate page, “The nationwide median error rate for the Zestimate for on-market homes is 1.9%, while the Zestimate for off-market homes has a median error rate of 7.5%.
What happens if an appraiser Cannot find comps?
If the appraiser isn’t able to find a single comparable property, you’ll likely struggle to move forward with a mortgage on that site. Some lenders may be able to proceed on a case-by-case basis with a single comparable. Having at least two good comps should help you breathe a bit easier.
Should you give comps to appraiser?
If your sole purpose is to offer comps that will help improve the value (which is obvious to a good appraiser), stop right there. It’s not okay to try and persuade or coerce a real estate appraiser to “hit your mark”, or appraise the property at or above a certain value.
How recent do comps have to be for appraisal?
Bare Minimum: Appraisers must use at least 3 closed sales as comps. One Year: Comps need to have sold within the past 12 months, though an appraiser can make an exception if there is a good reason to use older sales (custom home, no truly recent competitive sales, etc…).
How far back should comps go?
When an appraiser is looking for comparable properties to determine a price, they are supposed to only look at sales within the last 90 days. Now, if there aren’t enough sales a lender might go back six to 12 months. But the ideal is 90 days.