NEW YORK, March 18, 2013 /PRNewswire-iReach/ -- The real estate experts at RealtyPin.com talk about them all the time, but what exactly are "comps"? And, more importantly, how do you use them to your advantage?
Comps are short for "comparables". They're listings of all the properties that have sold in a particular area recently. Comps will give you the address of the home, how much it sold for, the selling price per square foot, and a few basic details about the home itself (like age, size, etc.). That way, you and your realtor can see which homes are similar to yours.
OK, so what do you do when you find a home like yours in the comps?
You use the information to figure out what the market is like in your particular neighborhood. By looking at a variety of comps, you can see what buyers are willing to pay in your area – which will give you a good idea as to what you should ask for when you list your own home for sale.
Typically, a good realtor will look at comps from the past few months in order to set a selling price. However, these days, the market is changing so quickly that you might only be able to look at comps from the past few weeks in order to get a good idea of what the current market is doing.
What if you can't find any comps of homes that are just like yours?
For a good realtor on, that's no problem! Just go to RealtyPin.com to find a realtor for you. As long as you have access to the raw data, you can go from there.
For example, if you see that a home down the street sold for a certain price – but it has one more bedroom than your home does – just take a look at the price per square foot, then adjust your price accordingly. Or, take into account that one of the homes that just sold doesn't have a pool – and yours does. Then, you can increase your asking price a bit.
Once you've got the asking price set, you can use comps to your advantage in the negotiation process. For example, if you know what nearby houses are selling for, you'll be able to make an educated counteroffer if a buyer tries to lowball you.
Just remember – while you and your realtor will use comps to determine the market value of your home, an appraiser won't. Instead, they'll use other data to come up with a valuation for your home. If you plan on challenging the appraisal of your home, you'll have to come up with more evidence than just comp data.