What does it mean for a property to be comparable?

Comparables (comps) are used in valuations where a recently sold asset is used to determine the value of a similar asset. Comparables, often used in real estate to find the fair value of a home, are a list of recent asset sales that reflect the characteristics of the asset an owner is looking to sell.

What do comps tell you?

Comps, an abbreviation of “comparable sales,” are used to determine a home’s fair market value through the sales comparison approach to pricing property. By analyzing real estate comps, you can determine how they differ from the subject property and then calculate how these differences have affected their sales price.

What is comparable property in real estate?

Definitions of Comparable property A comparable property is a property selected to help estimate the value of a subject property in a given market. The comparable property must be relevant in terms of features and attributes that are determinants of value in a market within a given time frame.

What is a CMA in real estate?

What Is A Comparative Market Analysis (CMA) In Real Estate? A comparative market analysis is a tool that real estate agents use to estimate the value of a specific property by evaluating similar ones that have recently sold in the same area.

How far away can Comps be?

Comps should ideally be within one mile of the subject property, and not over any major barriers like a freeway, a river or railroad tracks. Comps need to be in the same city as the subject property in most cases, even if a comp in another city is less than a block from the subject property.

How many comps are in a CMA?

Main Comparison Points Ideally, at least three to five comps will be used to prepare a CMA. Your Realtor will compare these factors to your home or the home you want to make an offer on to determine whether it’s a good fit for your CMA. Recent renovations/improvements (new HVAC, new roof, etc.)

How does location affect the value of a home?

In addition, a location’s proximity to highways, utility lines, and public transit can all impact a home’s overall value. When it comes to calculating a home’s value, location can be more important than even the size and condition of the house. → Learn more about how we calculate the value of your home.

What causes the value of a property to increase?

The phenomenon of capital value appreciation or growth of a property’s market value over time happens because of various factors, including: The supply and demand dynamics of a particular location. How fiscal inflation is behaving.

Can a real estate value go up or down?

Here in Massachusetts, most people realize Real Estate values can go up or down depending on the market over a period of years. As values either rise or fall, some folks think their taxes would go up or down along with them.

How does square footage affect the value of a house?

When estimating your home’s market value, size is an important element to consider, since a bigger home can positively impact its valuation. The value of a home is roughly estimated in price per square foot — the sales price divided by the square footage of the home. Say a 2,000 square foot house sold for $200,000.

Which is better, a similar property or a competing property?

Generally speaking, the more similar a competing property is to the subject property, the better. 22 A high degree of similarity in property characteristics between the subject property and the 23 available properties improves comparability.

How is the value of a property determined?

The theory is that the value of a property can be estimated by summing the land value and the depreciated value of any improvements (structure). Let’s say you found a fabulous Sarasota beach home on Casey Key for $4,000,000 that you are thinking of buying. However, you notice that the lot next door is for sale at $1,000,000.

What happens when the assessed value of a house goes down?

Their assessed value is now changed to the lower amount. Does every other homeowner who has a similar property get a notice in the mail saying their properties assessed value will also be coming down courtesy of the research done by Mr. Smith who lives down the street?