Real Estate Comps for My Area - How to Find Them

Reader Question: "I have been told I need to look at real estate comps in the area where I want to buy. How do I find comps and how do I use them to evaluate prices?"

Both buyers and sellers use real estate comps, but in slightly different ways. Sellers should use them to set their asking price, and buyers should use them to make a well-informed offer on homes. I'll assume you're on the buying side of things, since that is the nature of this blog. With that in mind, let's talk about how you would find real estate comps for your area, and how you should use them when shaping your offer.

But first, let's start with a definition for the benefit of other readers:

Comparable Sale -- Also known as a "comp" for short, this is a recent home sale within the area of your interest. Specifically, it's the sale of a home that is similar / comparable to the one you are looking at.

In order to be useful, a real estate comp should have three characteristics:

• Comparable -- The home(s) for comparison need to be similar to the one you are planning to buy. If I'm about to make an offer on a two-story colonial with 2,000 square feet, I should be looking at recent sales for two-story colonials of similar size in the same area.
• Recent -- Market factors change all the time, and home values rise and value in relation to this. The sale price of a home two years ago is irrelevant in today's market. So you need to look at recent sales data when analyzing the market. Ideally, your real estate comps will have occurred within the last 90 days.
• Local -- Home prices vary by location. So you need to look at comps in the area where you want to buy. The closer the better.
  

When you put theses three things together, you have all the ingredients of an accurate real estate comp you can use to shape your offer. You have sales data for homes that are (A) similar in size and style, (B) fairly recent, and (C) in the area where you're buying. This is the only kind of comp worth using.

How to Find Comps in Your Area

Now that we know what they are, let's talk about how to find real estate comps for your area. If you have a real estate agent helping you through the process, he or she will gather comparable sales data for you. This is one of the key aspects of an agent's job, and a veteran agent will be expert at evaluating comps in the area.

You can also find recent sales data online these days. In fact, there are quite a few websites designed for this purpose. These websites include Zillow.com, Domania.com and Trulia.com. The big drawback to using these websites is the lack of information. You might see the price a particular home sold for in your area, but you won't get many details about the size and style of the property (one of the key ingredients of a real estate comp, mentioned earlier).

You can also check the county tax records for recent property transfers in your area, though this requires a trip to the county courthouse in most cases.

So that's how you would find real estate comps in your area, and what to do once you have them. I hope you have found this article helpful, and I wish you well in your home buying process. If you have any other questions about this or similar topics, click on the "Ask Us" link at the top of this blog. Good luck.