Most real estate agents use the lingo ‘comps', but sometimes the people they are communicating with are not familiar with the term and it's meaning. Therefore, it is important as a real agent, you make sure your client understands the meaning of ‘comps'. Comps can be defined as creating a comparative market analysis (CMA) of the seller's property (normally refer to as the subject property) versus other similar properties (normally refer to as the comparative properties). Following is a list of some of the criteria that should be included into a CMA:
If possible, always use properties sold within the past 6 months
Some of the comparison data that should be included in the comps: effective age of house (reflect updates), square footage, number of bedrooms, baths and garage spaces, sold price less repairs and seller contributions at closing, landscaping, patios/decks, lot size, pools, location, traffic concerns, roof, chimney and fence.
Always use properties close to subject property. This tends to give greater accuracy.
Identify the seller's competition.
Provide an Absorption Schedule identifying how fast properties are selling.
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