How to Get Real Estate Comps (CMA)
Written by Nick Cifonie on March 2nd, 2010{ Add Comment }
“How do I get good Comps?”
This is a question I get asked over and over again from Real Estate Investor Online viewers on our contact form. “Comps”, or a “comparative sales analysis” (or CMA) as they’re known tell the investor or home buyer how much the TRUE value of a property is. Without good comps, especially in a falling market, you’re likely to overpay, and wind up a motivated seller!
Only use the prices of SOLD properties, NEVER listed prices!
Knowing the value of a property is the key to making an offer, and I don’t make ANY offers without running comps 1st. There’s ways to get free comps, but I suggest using a service, finding a Realtor you can pay to do it for you (or marry one?) or using the online paid sites are the most accurate.
Yes, I know most would prefer to use the free sites, like Zillow and others, but I personally have not found them accurate. I have seen $50,000 errors either high or low, and I would rather pay a Realtor or a service to do it RIGHT, rather than save a few dollars and overpay $30k for a property. In any case, DO YOUR HOMEWORK!
The service I use is called “Investor Comps Online”. (Click here to see the site) I know the owner personally, and he’s offered a 50% half-off price for each of your 1st 2 months if you’re one of my viewers.
Mark has several options, one is pay “per comp” as you go, a package giving you 20 a month, or an unlimited package, where you can get as many comps as needed for a flat rate. Put in the code ICORTV for half off. (this isn’t a sales pitch, it’s truly the people I use for all my deals, and they make it SO easy)
We’ve looked at many different services, so far, it’s the best we’ve found anywhere!
You’ll even be able to see how much they owe, and other stats. They have comps for most of the country, but there are a few areas they don’t cover. In fact, Mark will even invite you to webinars and teleseminars, teaching you HOW to use the comps to make your offers.
Once you have your “comps”, and know the prices houses are selling at, it’s time to evaluate!
- Only use sold house prices, never listed ones
- Do not use these comps for properties over 4 units, those are commercial, and done differently
- Try to use comps as close as possible to the subject, hopefully less than a mile, and closer
- Comps should be as “fresh” as possible, 30 days old or less
- Compare “apples to apples”, not 3 year old homes to 60 year old ones
- If a property is priced substantially higher or lower than the rest, find out why
- If the comps are extremely varied, figure out the square footage price for the area, and use that
- Use high comps when you’re selling, and lower comps when you’re buying, in negotiations
No matter where you get your comps… a paid service, a Realtor friend, the courthouse, or elsewhere, make sure that you calculate accurately. Get help at 1st if you need it, and always “compare apples to apples”.
I know we all want deals, but in many cases the best deal, is the one you walk away from. Don’t become emotionally attached, use REAL numbers to make your offers, not what the seller tells you it’s worth, and “do your homework”.
Now go make an offer!
Nick
