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What Are Comparable Sales?

A comparable sale, or comp for short, is a property that has recently sold that is similar in design and appeal to the subject property. A comp will be used to determine the market value of your home at a given time.

 

 

There are several criteria that make a home a comp:

 

Proximity - A good comp must be nearby the subject property, preferably within the same neighborhood. While there is no specific limit as to the exact distance a comp must be, a general rule of thumb for a typical is that a good comp will be within .5 - 1 mile of the subject property. Of course, this distance can be greater in remote or rural areas.

 

Sale date - the more recent the sale, the better. Because of the nature of a rapidly changing real estate market, a comp that sold a year or more ago is no longer an accurate determination of the current market value. Comps that have closed within the last three months are preferred, but that time frame can be extended if there is little or no sales activity.

 

Comparability - The comps used should be of similar square footage, bedroom count, bathroom count, age and condition. Attempting to use a 3,000 square foot home that was built 5 years ago to determine the value of a 1,500 square foot home built 35 years ago would not be an acceptable practice.

 

Once the most appropriate comps have been selected, the appraiser will then compare their features with those of the subject property. If the subject has a superior feature, such as a pool, the comp's value will be adjusted upwards. If the comp has the superior feature, the value of the sale will be reduced. This process requires some discretion on the appraiser's part as determining the exact value of an extra bedroom, an upgraded kitchen or any other superior feature is not an exact science. The appraiser will employ universally accepted methods for making these adjustments.

 

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Would you prefer to speak with a Loan Coordinator over the telephone?  Please call us directly at   1-800-276-CYOL(2965) and choose option 1.  Or, click here to have one of our experienced representatives contact you directly.