A comp, or comparable, is a Real Estate term which refers to the method of appraising a property based on other homes in the same area, with the same characteristics, which have recently been sold (sales comparison approach).
Some of the other factors to determine a home’s value include:
Besides being completed by a licensed Realtor, comps can also done by licensed home inspectors, certified appraisers and surveyors who use more specific methods to determine a home’s value during their Real Estate appraisal.
“Recent” Home Sales
When a Realtor ® mentions homes which have “recently” sold for the purpose of comps, most Realtors will typically mean a home which has sold in the last 90 days or less while some agents might look for comps which were sold as far back as six months ago or more. This would typically be done only if there are not enough sufficient sales in the area to give an accurate valuation.
In Real Estate some agents and estimators will also use the cost approach to determine a home’s value.
With this method the person who is estimating a home’s value will also factor in recent repairs to the home then make deductions from the homes value for issues like external or internal obsolescence, disutility and depreciation to determine the real value.
For more information about comps contact Fred Sed & Associates today by calling us at (949) 272-0125.