Wholesale Real Estate Comps are all about comparing and contrasting, get it? Basically, they’re records of recent sales transactions of homes similar to the one you’re thinking about selling or buying. It’s like a way to find out what your house is worth or what you should pay for a new place.
Now, why do we use comps? It’s simple, my friends. We use them to make sure we’re not overpaying or underselling. You got buyers, sellers, appraisers, and real estate agents all relying on comps to make informed decisions.
For sellers, running comps can help determine the fair market value and an accurate listing price for your property. And for buyers, comps can help you determine a fair price to pay. And when it comes to appraisers, they use comps to verify that the price of the home is justified by recent sales activity of similar properties. Real estate agents use comps as part of a comparative market analysis, or CMA.
So, can you run comps without a real estate agent? Absolutely! With today’s technology and online resources, you can easily run comps on your own. Just check out your county’s assessors or tax collectors’ websites or search on Zillow or Redfin to find recent sales using criteria like location, sale date, square footage, and more.
And finally, when running comps, make sure to consider factors like location, sale date, square footage, and more. Look for comps in the same neighborhood, city block, or area as your property and make sure the comps are within a certain range of square footage and sale date.
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As a real estate investor, it’s important to understand the market value of properties and to know how much a property is worth. This is where real estate comps come into play. In this blog, we will be discussing everything you need to know about wholesale real estate comps, including how to do them, why they are important, and what to do if properties are not similar.
What are Wholesale Real Estate Comps?
Real estate comps, also known as comparables, are recent sales of similar properties that help determine the market value of a property. These comps are used to estimate the value of a property by comparing it to similar properties that have recently sold in the same area.
Let’s say the subject property is a 1,500 square foot, 3-bedroom, 2-bathroom single-family home in a suburban neighborhood. The first step in running comps is to gather data on similar homes in the same neighborhood or nearby areas that have recently sold.
This information can be obtained from public records, websites like Zillow or Redfin, or by working with a real estate agent who can access the Multiple Listing Service (MLS).
Once the data is collected, the person running comps should look for homes that have similar characteristics to the subject property, such as:
- Location: The comp homes should be in the same neighborhood, city block, or area as the subject property.
- Sale date: In a hot real estate market, comps should be no older than 30 days. If there isn’t a lot of activity in the market, the search time frame can be pushed back to the past 3 or 6 months.
- Square footage: The best comps are within 10% of the size of the subject home, or with a difference of no more than 300 square feet. In this example, the person would search for comp homes with 1,350 to 1,650 square feet.
- Bedrooms and bathrooms: The comp homes should have a similar number of bedrooms and bathrooms as the subject home. In this example, the person would search for comp homes with 3 bedrooms and 2 bathrooms.
- Lot size: The comp homes should have a similar lot size as the subject home.
Once the comps have been identified, the person running comps can compare the sale prices of the comp homes to the estimated value of the subject property to arrive at a range of its value. This information can be used by homeowners and investors to determine a fair price for a property being sold or purchased.Example of a wholesale real estate comp
The Importance Of Getting Your Wholesale Real Estate Property Comps Right!
As a successful real estate investor, I can tell you that there’s one thing that sets apart the successful investors from the failures: the accuracy of their real estate comps. Comps, or comparables, are an essential tool in real estate investment, allowing investors to determine the value of a property by comparing it to similar properties in the area. And, when it comes to making smart investment decisions, accuracy is key.
Let me tell you, I’ve seen it all in my many years in the real estate industry. Some investors believe that comps are a simple matter of finding a few properties with similar square footage and calling it a day. But, that couldn’t be further from the truth. The truth is, real estate comps are a complex, nuanced process that require a deep understanding of the market, local trends, and the unique characteristics of each property. And, the only way to get accurate comps is by doing it the right way.
So, what exactly does “doing it the right way” mean? Well, first of all, it means that properties used for comparison must be similar in key factors such as location, size, age, and features. Simply put, you can’t compare a luxury penthouse in a bustling downtown area to a small cottage in a rural neighborhood and expect accurate results.
And, you don’t need a realtor to get accurate comps. In fact, many real estate investors prefer to do their own comps because they want the most up-to-date and accurate information possible. By using online tools, public records, and market reports, you can get a solid understanding of the local real estate market and use that information to make informed investment decisions.
Getting real estate comps correct is critical to making smart investment decisions. Don’t be fooled by the simplicity of the process – it takes a deep understanding of the market, careful consideration of the unique characteristics of each property, and a willingness to adjust the comps as needed to achieve accuracy. So, take the time to do your research, use the right tools, and always strive for accuracy in your real estate comps. Trust me, it will be worth it in the long run.
Why are Properties Similar?
For real estate comps to be accurate, it’s important for the properties being compared to be similar. This means that the properties should have similar square footage, number of rooms, age, location, and other relevant factors. The more similar the properties are, the more accurate the comps will be.
What to do if Properties are not Similar?
But, what do you do if you can’t find similar properties for comparison? In this case, you need to get creative and consider adjusting the comps to account for differences. For example, you might need to adjust for square footage, number of rooms, or upgrades in one property versus another. This can be done by using a real estate comps calculator, which can help you make adjustments based on the unique characteristics of each property.
How to do your own Wholesale Real Estate Comps Free?
There are several ways to do your own real estate comps for free. One way is to use online real estate websites such as Zillow, Redfin, and Realtor.com. These websites provide information on recent sales of similar properties in the same area, which can help you estimate the market value of a property.
Another way to do your own real estate comps for free is to use a real estate comps calculator. This calculator uses information such as square footage, number of rooms, location, and other relevant factors to estimate the market value of a property.
How to Get Real Estate Comps Without a Realtor?
If you don’t want to use a realtor, you can still get real estate comps. One way is to use public records such as the county assessor’s office or the local MLS. These public records provide information on recent sales of similar properties in the same area, which can help you estimate the market value of a property.
What are Wholesale Real Estate Comps Based On?
Real estate comps are based on several factors, including square footage, number of rooms, location, age, and other relevant factors. These factors are used to compare properties and determine the market value of a property.
Who Uses Real Estate Comparables?
Real estate comparables are used by a variety of people, including real estate agents, investors, and home buyers. They are an important tool for determining the market value of a property and are used to make informed decisions about buying, selling, or investing in real estate.
What are wholesale real estate comps?
Wholesale real estate comps are comparative market analyses used to determine the value of a property.
Why are wholesale real estate comps important?
Wholesale real estate comps are important because they provide a clear understanding of the current market value of a property and help investors make informed decisions when buying or selling real estate.
What factors are considered when doing wholesale real estate comps?
Factors considered when doing wholesale real estate comps include the size of the property, location, age, and overall condition of the property, as well as the current market conditions and trends.
How do you find wholesale real estate comps?
Wholesale real estate comps can be found through a variety of sources, including online real estate databases, real estate agents, and local public records.
What is the best source for accurate wholesale real estate comps?
The best source for accurate wholesale real estate comps is a combination of online real estate databases and local public records, as well as input from a licensed real estate agent.
Can you do your own wholesale real estate comps?
Yes, it is possible to do your own wholesale real estate comps, but it is recommended to consult with a licensed real estate agent for the most accurate information.
How do you make sure the properties you are comparing are similar?
To ensure that the properties being compared are similar, it is important to consider factors such as size, location, age, and overall condition of the property.
What do you do if the properties you are comparing are not similar?
If the properties being compared are not similar, it may be necessary to adjust the comps to account for the differences and get a more accurate picture of the market value of the property.
How do you adjust wholesale real estate comps for differences?
Adjusting wholesale real estate comps for differences can be done by considering factors such as size, location, age, and overall condition of the property and making appropriate adjustments to the comps to account for these differences.
What is a wholesale real estate comps calculator?
A wholesale real estate comps calculator is a tool that helps investors determine the value of a property based on comparative market analyses.
Can you get real estate comps without a realtor?
Yes, you can get real estate comps without a realtor by using online real estate databases and public records.
What are real estate comps based on?
Real estate comps are based on comparative market analyses of similar properties in the same area to determine the value of a property.
Who uses real estate comps?
Real estate comps are used by a variety of people, including real estate investors, home buyers, sellers, and lenders.
Why is it important to get real estate comps correct?
It is important to get real estate comps correct because they provide the basis for making informed decisions when buying or selling real estate and can have a significant impact on the value of a property.
In conclusion, real estate comps are a crucial tool for determining the market value of a property. By understanding how to do them and what to do if properties are not similar, you can make informed decisions about buying, selling, or investing in real estate. Whether you’re a real estate agent, investor, or home buyer, knowing how to do real estate comps is essential for success in the real estate market.