If you’ve ever worked with a real estate agent before, you’ve probably heard the word “comps” and wondered what exactly it meant. Before you look at Lakewood homes for sale or consider listing your home on the market, it’s important to understand this frequently used real estate term. Here’s everything you need to know about “comps”:
What are comps?
The word comps is short for comparable sales. Real estate agents pull comps, which are homes that have recently sold, to determine a fair price for homes that are currently on the market or about to be listed. For example, if you are meeting with an agent to sell your home, he will pull comps to figure out a fair asking price for your home. On the other hand, a buyer’s agent will use comps to calculate how much a client should offer on a home that is on the market. Agents should pull more than one comp in order to get a better idea of the market. Here’s what you need to know about comps
The location matters
When agents pull comps, they have to pay close attention to the location of each comparable home. For example, if you are interested in a home within a gated community, your agent cannot look at comps from a home in another neighborhood across town. Why? These two homes are not comparable, so it wouldn’t make sense to assume they should be priced the same. The location of a home can have a huge impact on its value, so this is an important factor to consider.
Timing is everything
Because the market fluctuates so much, the agent has to be sure he is pulling comps from homes that have sold recently. Pulling a house that sold over a year ago will not give you a good idea on how homes are priced in today’s market. It’s recommended that agents never look past 90 days of sales. However, the agent may find that no comparable homes have sold within the last 90 days, and therefore, he may need to extend the timeframe out to six months to get an accurate read on the market.
Every house is not comparable
It’s important to remember that not every house can be compared to others. Even if you pull comps on other homes in the neighborhood that have been sold within the last month, it’s possible they will not provide you with accurate data. Why? Some homes have unique features that add value to them. For example, if your home is the only one in the neighborhood that has a pool and a view of the lake, it will without a doubt be priced higher than other homes nearby. When your agent pulls comps, you have to keep unique features like these in mind and be aware of how they will affect the price of your home.
Now that you know how to understand comps, it’s time to find a real estate agent who understands your needs. Contact us
to talk to the experienced agents at Colorado Home Sales.