Source: Forbes —
Buying a home is an all-encompassing process. It’s like a part-time job that requires hours of research, work and money. The last thing you want to do is pay more than you need to for a home. And that’s where real estate comps come up. You can use comps to help you find the right home in your budget for the best price.
What Are Comps in Real Estate?
Real estate comps are comparable homes in your area that recently sold. For instance, if you’re looking at a three-bedroom, two-bathroom home, you can explore similar homes in the same neighborhood that recently sold. This will give you an idea of how much you can expect to pay for that type of home in the neighborhood you want to live in.
Comps are based on many different factors, including the number of bedrooms and bathrooms, amenities such as a garage or pool, square footage and others.
Who Uses Real Estate Comps?
Comps are an asset to a lot of people in real estate. They’re important to homebuyers and other groups as well.
Sellers
When listing a home, sellers need to know what other, similar homes in the area sold for recently. This gives them a reasonable expectation of market conditions and what price they should set on their house.
Buyers
Homebuyers use comps to see how other homes in the area sold based on similarities. It helps buyers determine if the home they’re looking at is reasonably priced. If it’s got a high asking price, buyers can use comps to negotiate.
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