When you are looking to sell a home, one thing that you may do is look at comparable properties (“comps”) in the neighborhood. The idea is simply to get an idea of what your home is worth by seeing what other homes around yours are selling for. Once you know what they are going for, this gives you some idea of what you should set as your asking price or where you should try to get in negotiations.
But are these comps accurate? Some home sellers and buyers will complain that they do not believe the comps tell the whole story.
Finding similar properties
Whether or not the comps are accurate really depends on if they are carried out properly. Remember that the goal is always to find another home that is as much like yours as possible. This can show you what it sold for at a recent time.
The problem is that comps could be done incorrectly. For instance, if there is a much nicer neighborhood close to yours, comps for homes in that area could be much higher than what you should actually expect. Another example could be if the comps are taken from too long ago, and the real estate market has dramatically moved – either up or down – in that time.
So comps can be helpful, but they are not without their downsides. The amount that another home sold for does not guarantee that is exactly what yours will sell for, but it gives you a place to start. As you work through this process, be sure you know about all of the legal options at your disposal.
