If you have ever been involved in selling or buying property, you may have heard the term “comps”.
Most of the people only
know that comps is the abbreviation of comparables and nothing more. If you want to know more about this term, then give this read a couple of minutes.
What are Real Estate Comps?
In real estate terms, comps refer to the price paid for recently sold property that is comparable in location and size. With comps, you can estimate the current market value of property in your surrounding areas.
Real estate agents and sales officers use comps to analyze the overall price of the property. But which property to choose for comparison is a subjective matter here. In the same street, you may find two houses with a noticeable difference in price. One could have had some sewer line repair and the other could not. So how sales officer choose the property for comparison?
According to real estate experts, those houses are chosen which have the same number of bedrooms and similar square footage.
How do they Affect You?
Comparable properties affect the value of your own house greatly. Real estate agents look at the price of houses with similar features in your surroundings to put a benchmark price tag on your house. Comparable (together with offer details) are generally the main driver for the assessment process: most evaluators will bank on heavily on latest nearby dealings on homes of analogous size to yours.
Comps play an important role in property selling and buying. Therefore, it is necessary for you to know the complete detail about comps and how it can affect your real estate business or property’s value. I hope that after reading this guide, you will be able to learn what real estate comps are and it can affect you.