Newbie here,
What is the most effective way to get accurate comps?
good realtor
be sure to get SALES comps, and not just comparative listings. those are about worthless.
Thanks mcwagner,
Is it common for realtors to be asked for a list of sales comps?
Also, do realtors commonly give out mls info?
very… i get comps from my agent almost daily w/ no problem
I have heard people using sites like MyCastle and Zillow. MyCastle seems to be better than the two. I have not seen good numbers come out of Zillow.
As a realtor, I suppose I should always suggest using a realtor, but at least in the Dallas/Fort Worth area, I have a number of investors that use MyCastle to get some of their comps. It certainly has its quirks, but most of the non-MLS sites will. The trick is finding real comps within the area specified. If you comps come from the other side of a major road or freeway, they may not be accurate because the neighborhood can drastically change from one side of the road to the other. It’s the whole “wrong side of the tracks theory.”
Realtors can obviously pull comps for folks, but in all fairness, they will want the hope of getting future business. I pull comps for some investors, but they will commonly utilize my services as an inspector instead of as an agent.
I have two investors in particular that I pull comps for all the time. I have pulled a number of comps for them, but every time they put a contract on a house, they hire me to perform the inspection on it. It’s a win-win for all of us, so I have no problem pulling comps for them whenever they need it.
Good luck.
Lee
Just curious, but I looked at Mycastle and saw plenty of listings, but when getting a loan and trying to judge an investment, don’t you need to see past closed sales? I know an agent can provide this, but is there a place to find past sales online, or did I just miss it on that site? 
I don’t use MyCastle, personally, for obvious reasons. If I have the MLS at my disposal then there is no reason for me to. However, I have had investors send me sold properties that they have found through MyCastle, so I do believe they are on there somewhere. I just wouldn’t know where. Sorry.
Lee
The best comps come from a real estate agent. Develope a good working relationship with a GOOD HARD WORKING agent.
what is a comp?
A “comp” is a “comparable” property…from the Investing Glossary (look on the left side of the page under “Investor Information”:
Comparable Sales - As part of the appraisal process, those relatively recently sold properties which will be compared to the subject property (the property being appraised) for the purpose of forming an opinion of value for the subject property. The facts and details of the comparable properties will be compared to those of the subject. In an urban setting, to be of credible assistance in this process, comparable sales must have the same use as the subject, have many similarities to the subject in terms of size of house, size of lot, construction, bedroom count, room count, floor plan, amenities, street traffic and be in the same neighborhood and have been sold in the recent past (preferably no more than six months) by way of an “arms length” transaction (i.e., not sold to a relative or friend and not sold due to a forced sale or distress sale) and be within one mile of the subject property. More liberal standards will apply for rural property and some suburban properties but the basic premise holds, the more similar the comparable sales are to the subject property, the more accurate the value assigned to the subject property will be. Lenders will often compensate for the less precise nature of rural appraised values by allowing only lower loan-to-value ratios than those in urban settings, usually 10% lower. (See definition of “loan-to-value” below.)
Keith
Thanks Keith
You’re welcome.
Keith
A knowledgable realtor is by far the best source. Just pulling raw comps doesn’t tell you what may have happened in that area in the past 6 months (appraisals only allow 6 months history on comps), what new things may be coming down the pike in that market (or even neighborhood!), whether the comps are dumps, or castles compared to the property you are looking at, etc. Any of these things and more can really affect your bottom-line; whether flipping or holding for income.
A good source for getting an incredible search tool for non-realtors to access the MLS listings is a service from some realtors called Home Buyers Marketing. It’s tied directly to the MLS’ and is updated daily. Almost none of the other on-line sites do this, as they don’t have “agreements” with the local real estate boards to do this. I’ve found it invaluable. It’s tough to find a realtor that offers it, but well worth the search. It doesn’t provide comps, but as I said, you want realistic ones, get a super realtor on board.
how???
how can i convince a realtor to run the comps for me on properties that i’m not getting through him?
and how do i develope a good working relationship?
There are a number of ways to establish a good wroking relationship with a realtor. Keep in mind that they are looking to make a living, just like you are. Maybe you can pay them a monthly fee for pulling comps for you. You can do it on an unlimited number of comps or a set amount. It all falls back to how much time are they going to spend doing work for you, and what they are willing to take in return. That is just one example.
My case is a little more unique. Being that I am both a licensed realtor and a licensed home inspector, it works well for me. I have some investors that I run comps for. However, when they do purchase the house, they will have me do the home inspection for them. I can’t be an agent and an inspector in the same transaction, so I don’t provide them the normal services that a buyer’s agent would. I simply help them out with comps knowing that they will always utilize my inspection services. They also help me by giving referrals. This creates a win-win situation for everyone involved. They get the comps they need and a quality home inspection so that they know exactly what they are buying. By having an inspection, it helps them minimize the surprise rehab costs for things they weren’t counting on that they may find out after the closing without an inspection.
Hope that helps…
Lee Warren
good info. thanks.
it would be great if i found someone like you to work with here in new york.