How to determine home value using comps. Report comment. Choose homes that are as similar to yours as possible in terms of style, construction, age, square footage, number of bedrooms and bathrooms, total room count, amenities, lot size, etc. From calculating cash-on-cash return to running a comparative market analysis, the experts at BiggerPockets demonstrate the steps you need to follow and the statistics you must know with The Beginner’s Guide to Real Estate Market Analysis. May be you could also try to search on the web for listings. For example, a comp within a block or two of yours might not be a good comp because it sits higher on the hill and has phenomenal views, or … Neighborhood — Is the house well-kept but all others around it falling apart? We are interested in a SFH , but the listing price is 189K. Now, if there aren't enough sales a … Thank you for an informative article. Can I use another creekside home as comparable or use this as a reason to go outside the neighborhood or is there an adjustment and if so how much? You’ve got to do research and figure out what the different characteristics mean monetarily in your market. For example, a comp within a block or two of yours might not be a good comp because it sits higher on the hill and has phenomenal views, or it’s closer to a main arterial or freeway. However, it doesn’t account for a choice location, a move-in-ready home or personal criteria. Bob. Good article. Once completed, appraisers will supply the URAR to the client’s lender. They make adjustments along the grid based on the similarity in size, area, sale date, proximity and all other factors. It is a standardized report which loan officers and underwriters are trained to read and comprehend because the home valuation determined by the appraiser is crucial to the loan-to-value (ratio) of the mortgage. Adjust the price of any comparable properties if they are superior or inferior to the property you’re purchasing. BPO’s are exactly what it means[ BROKERS price opinion. Can you comment on what constitutes a similarly sized home, and how you adjust when the comparable are substantially different as in this case (50%)? Lance, I am not an appraiser but it honk it should be adjusted for or similar comps used. OR. Appraisers Should an agent submit reconsideration comps, it is wholly up to the appraiser to determine if the comps are meaningful and more similar than those originally selected. I just wonder how much of it was due to BPOs:/. Appraiser’s should not participate in doing BPO’s or reviews of BPO’s. If they are within 10% that’s good. When you get up to houses built within the last 20 years, it is best to narrow your search down to a 5 year window if possible. You can use comps, too. Mark, Duh? Appraisers always search for comps that are most similar to the subject property in a variety of ways- size, location, construction, etc. BPO’s are not a good basis for lending. That is only an example of the superior amount of analysis involved in an Appraisal as opposed to a BPO. The answer we expected to be very popular, “To provide the client with up-to-date photos of the comps – ensuring they exist in the stated condition,” only received 22 percent of the vote. If you wish to report an issue or seek an accommodation, please, Zillow, Inc. has a real estate brokerage license in multiple states. Good nuts-and-bolts article, Mark, your perspective as a practicing agent is invaluable. If you can learn to accurately apply adjustments to comparable sale or rental properties, it greatly improves your—and ensure your continued real estate success. Is the 10 year range acceptable when you have a subject property built in let’s say 93-97′ ? ?Built in 1967 Now I know who to call for an opinion when I disagree with a BPO. Oh man. many appraisers realized they could do more inspections if they did not waste 30 min to an hour taking comp … How to Carve the Best Pumpkin on the Block, Regain Your Garage: Simple Tricks for Getting Organized, Curb appeal — The house sits on the “nice” side of the street; it’s neatly landscaped and has sidewalks. Receive a free digital download of The Ultimate Beginner's Guide to Real Estate Investing. If there are too many, landlords are going to have to fight hard for any tenants and may have to come down a lot by making concessions.
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