What are comps?

Comps are used to help estimate the value of a given property by looking at similar properties that have recently sold in the same area.

In real estate, comps refers to comparable properties, which are used to help estimate the value of a given property. When appraising a property, appraisers will look at similar properties that have recently sold in the same area in order to determine what the subject property is likely to sell for. In order to be considered comps, the properties must be of a similar size, location, and type.

For example, if an appraiser is appraising a three-bedroom, two-bathroom home in a suburban area, they will look at recently sold homes in the same subdivision that have similar square footage, number of bedrooms and bathrooms, and so on. The idea is to find properties that are as similar as possible to the subject property in order to get the most accurate estimate of value.

While comparable properties are the most common type of comps used in appraisals, they are not the only type. Appraisers may also use “substitute properties” if there are no comparable properties available. Substitute properties are usually similar in size and location to the subject property, but may be of a different type. For example, if an appraiser is appraising a three-bedroom, two-bathroom home in a suburban area, but there are no similar homes that have recently sold, they may instead look at three-bedroom, two-bathroom homes in a nearby urban area.

The use of comps is not limited to appraisals; real estate investors and agents also use them to estimate the value of properties. When estimating the value of a property, it is important to look at as many comps as possible in order to get a well-rounded estimate.

In conclusion, comps are an important tool that can be used to estimate the value of a property. Appraisers, investors, and agents all use comps in different ways, but the goal is always the same: to find similar properties in order to get an accurate estimate of value.

Category: Slots.

What are comps?

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