If you find yourself forced to sell your house, running comps or a comparative market analysis is one of the steps to take in order to assess the market value for your property. Determining the market value will help you assess the fair price at which to sell the house. Here’s how a comps is done.
Analysis. First, the house will be analyzed thoroughly and carefully. All of the physical aspects of the house will be noted down, including the age of the house, the materials that are used in the construction of the house, the quality of construction and craftsmanship, the number of rooms, the number of bathrooms, the size, the number of square feet, the location, the design, the neighborhood in which the house is located, the other buildings attached to the house (such as garages, pool houses, maids quarters, basements), et cetera.
Matches. Once a thorough description and examination of the house has been undertaken, the next step is to find at least ten matches for the house. The matches are houses that are related to your house. The other ten houses do not need to have exactly the same characteristic as your house, but should at least be approximations of your house. The other matches should also be houses that have been sold in the real estate market during the last six months. Older than six months and the houses will no longer be credible matches for your house.
Comparisons. Next, a comparison between the different houses will be done, all in relation to your own house. This is done to determine the exact price that your house should have. For example, a house that is similar to yours but with one more bathroom has a price of $ 500,000. Another house that is similar to yours but with one less bathroom, on the other hand, is priced at $ 450,000. This means that your house will probably be priced at $ 475,000. Comparisons in the comparative market analysis, however, are much more intensive since ten matches will be used for comparison purposes.
Renovations. If you have renovated your house recently, you should tell the agent who is undertaking the comps. Renovations and improvements in the house can mean an increase in the value of your property. This should be noted so that you will be compensated for the effort that you have done for the property. Keep in mind, however, that other factors can undermine the renovations, such as depreciation and the over-all prices for homes.
In the end, the comps should give you the market value for your home. Keep in mind that the market value is sometimes much lower than the original price of the house or your perceived price for the property. Ask the agent who has done the comparative market analysis to explain the results and findings to you so that you will know exactly what has caused your house to be priced such. If you still doubt your agent, you can get another agent to undertake comps on your property. Usually, however, this is not necessary.