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What are real estate comps?

What are real estate comps?

In the world of real estate investing one of the important things that every investor must do is he or she must be able to place a value on a given property.  One of the ways that we do this is through comparable properties or comps, as they are called for short.

To be a true comp, the property must meet certian criteria.  The property must be in the same neighborhood, to include school district and zip code.  The property must have the same number of bedrooms and baths.   The property must be of similar size to the comparable properties.  Lastly the property must not be on the other side of a major highway or body of water.

To truely determine a comp value, the property that you are using must be a sold comp.  That is a property that has sold at that price.  This is especially true during market corrections.  It doesnt matter what a property is listed for, it matters what a real buyer will buy that property for.

 

The best way to get comps is from a real estate agent or broker who has access to sold comps through the MLS.