How important are listing comps?

[Dominique Grayson]

Hey guys. I have a question about listing comps.  I understand that sold comps are the ones to look at when you are comping your subject property but how important is a current listing comp? We have a house were the sold comps for that area is $350k. There is a house currently listed within .25 miles from that house that is selling for $350k and has been on the market for 35 days. It has already dropped in price. Should this be considered as a comp? If so, I've always been told to us sold comps and not listing comps. What are your thoughts?

[Larry Turowski]

@Dominique Brown Listing comps are very important for a couple of reasons.

1. They tell you what your right-now competition is.  

2. They tell you how much inventory is out there.  The more inventory, the lower the sale prices will be.

3. They can tell you how quickly things are moving right now.  As you noted, days on market is important.  If there are a number of current listings with high days on market (over 45 days), that tells you they are over-priced and it may mean that there are not a lot of buyers right now.

Sold comps are the most important because it isn't the listing price that makes you money, it is the sale price.  But current listings are important to.