Posted by Innovator on January 10, 2006 at 14:58:42:
Your RE agent is taking the easy way out (or maybe he doesn’t know how to do it the other way?). If you use the quadrant method you can compare block by block, but it takes more work and you have to know what you are doing in comparing like for like.
Running Comps - Posted by Tony Newbie
Posted by Tony Newbie on January 10, 2006 at 14:52:06:
I’m new to the game and I have a RE working for me. I was told by my RE, that when comps are run, it is based on subdivisions and not always block by block. It is difficult for me to understand that the house I am investing in is 80,000 and only 1 or two houses sold for 135,000 and up that is in this subdivsion. I was told I will be able to resale it for that amount, (135,000) depending on the appraisal. What is the true way of reading and noticing good comps along with rental comps?
Thanks,
Tony Newbie
Re: Running Comps - Posted by Brian (UT)
Posted by Brian (UT) on January 11, 2006 at 21:30:15:
Tony
Your agent is right, comparing the home to ones in the same subdivision gives a better picture because they are the most similiar. However you have to adjust for factors within the subdivision.
Example streets have diffent adjustments, the main traffic streets will sell for less than low traffic streets and cul-de-sacs. One subdivision I dealt in was in two different school districts and the homes in the better school district would sell for up to 10% more.
Another was in two different water districts and during a drought one year homes in the problem district were selling for 20-25% less.
After you compared the subdivision homes it would be wise to compare your results to a block by block result. Of course the final judge will be the buyers in the marketplace when you sell.
Brian