What Is The Best Way To Go When Using Comps? Part I

Part I

Kind of along the same line as how to determine the value of the market, you may question the best way to go when using comps. Many people wonder, is real quest the best way to go for that? There are a few who tend to think they are very conservative (and in the seller markets it always seems like the seller is such a conservative number). What you need to worry about here is the term conservative. You should be worried that they are not making guesstimates!

If you are living in a state that is a non-disclosure state, then you just might have something to worry about (or at least follow up on). Non-disclosure states aren’t really that different, they just don’t have good accurate data because of the non-disclosure.

As for the other states, what you are looking at is not a model…it is the actual sales of the properties on the same street, or the same neighborhood or same subdivision.

So when you are being conservative, it is not really an opinion that they are giving you, it is actually data you are receiving. Now you will have to render your own opinion and if you are making decisions based on sales that are a year old, those may be conservative and they may be ultra conservative in a market that is taking off like that. Now maybe you have seen the valuation model used, and are wondering if that is your answer. It could be the answer you are looking for. In fact, it just might be the answer you are looking for. But I am not the biggest fan of this model. In fact, I am not sure I want a computer model telling me whether I want to buy a house or not.

You still need to be educated and make the best decision for all of your home purchases. It really boils down to when is it truly appropriate to use your comps. And in the end-only you can answer that question! In part two we are going to discuss some of the factors that can influence your decision when using your comps.