How close does a Comp really need to be?

[Bob Ross]

I’d like to buy a small, older home in a high end town with the idea being to add on an addition with a bathroom, garage, family room - whatever it may need to become a more modern home with more square footage. With the goal of gaining significant equity.

I believe it will be important to look for a home with much more expensive homes nearby for comps. But my question is how close will do?

Some thing I’m finding are homes for say 450k with maybe a 1.1 million dall’orso home a couple streets over. Will this work for a Como

If the home to the left and right are 450k as well?

Does the “half mile” rule apply?

Thank you!

[Lara White]

@Jordan Fulmer is thinking exactly how I would on it!  Appraisers sometimes has crazy different opinions, but start with those parameters. I would also add, if you have a range of something (like years or square footage), be sure to go both ways when you limit as well.  For example, if your house is 1970, and you want to limit the year built to nothing more than 10 years older, you'll also want to limit it to 10 years younger (1960-1980).  Square footage example: Yours 2,000 ft - then go down to 1,800 and up to 2,200 ft.  If you don't need to restrict so much, you can leave those limiting parameters off, but if you use one limit, you really should use the other way limited as well to get the best results of what an appraiser might use.