How Do Comps Work in Real Estate?

Comparable homes are a tool used by nearly every real estate agent and realtor to help sell homes. When said this way, it may confuse people in how this works, but it’s not as complicated as it may seem. There are multiple ways that comps work in real estate to make everything go smoother and allow homeowners to sell their homes for more money, and in a shorter time. These are just the most basic four; there are dozens of more ways to make comps work for you!

Let You Know Where Your House Stands In The Market

Comparables are mainly here so that you can find where your home fits in the grand scheme of things. If your comps don’t sell quickly or are a much higher price than you initially put for your house, you can figure out what they’re doing wrong or right and decide how to apply it to your home.

There isn’t going to be some cookie-cutter perfect match home that is a replica of yours, so there may be some reworking to do, but if you focus on homes that are close enough to your own, they can still guide you through what to expect and how to sell faster.

Lets You Know How Valuable Your Home May Be

This question is a big one to which many people already think they know the answer. Unfortunately, asking yourself, “What is my home worth?” isn’t as useful as looking at substantial numbers. If a home comparable to yours is selling for far less than yours is listed at you need to consider if that’s why yours isn’t selling.

Unfortunately, this isn’t always the best course of action. First time home sellers almost always try to price their homes too high, while people desperate to sell will quickly list their home for pennies on the dollar. This information is why it’s essential to have more than one comparable property to calculate your price. It can also help to have a professional appraise your property and let you know their professional opinion.

Help You See What Upgrades Are Needed

Whether you’ve been putting off redoing your kitchen, or you want to remodel a bathroom, consider what’s available in your area. Are the other kitchens updated and gorgeous? Do they sell even with unfinished basements?

Look at your comparable and study them to see if they have anything your property could use and that you can add. Be smart with your money, though. A finished basement may sound like a good point, but homes with unfinished basements sell just as quickly, for a much smaller amount of work.

Allow You To Price Competitively

The final and best perk is that comparables allow you to price your property at a competitive price. If you want to sell faster, you can price lower, but you can generally gauge the right price based on what the comps are pricing their homes. Stage your home, deep clean it, and set it up for sale, because a comp will have you ready to let it go on the market.