How does everyone "pull comps"?

Question

Whenever someone analyzes a deal, I hear them say "I pulled comps on this area". I understand that to mean they took a look at comparable properties in the location of the potential deal. But how does everyone do this? Type in the address into Zillow, Redfin, etc. and look at the nearby, similar homes listed?

I could understand this for individual investors, but what do bigger investors do? What do brokerages do? Is any entity bigger than an individual investor using special software to scalably pull comparable properties in a particular area that then aggregates the unstructured data, make it structured, and then run it through some template to better analyze whether it's a good deal?

And what is their primary source for such tools? Zillow has pretty stringest anti-scraping system, so are they paying big software firms to do this scraping? Or are they partnered with dozens of RE agents who give easy access to the MLS with a custom API to quickly "pull comps"?

I would love if someone here who understands the ins-and-outs of how bigger RE players run comps walk us through this entire process and how it's done.

Steven S. · Answer

I actually just posted a whole guide about how I do it at scale, click my profile to pull it up. I've underwritten thousands of deals.

You can use RedFin, Zillow, or any Transaction-level data source. Draw a boundary around the properties neighborhood/sub-market (0.25 - 0.75mi usually). Filter last 6 months, filter for similar BR/BTH with +-5-10% of the square footage, sort high to low, and then you have a list of the top-tier closes for that housing product (hopefully they are renovated if that's your end goal), with the list decreasing in value as you scroll down. This will give you a really good idea of the ARV and the as-is value, to make sure you are in the right place on both. Then start to get into the details, pool or no pool, views or no views, etc to make sure the Comps you are selecting properly reflect your subject property once it is renovated.

Oh, and it's never bad to check Active & Pending comps with those same filters once you are done with the Sold comps, to make double-sure the product you will be delivering will be where you think. I've called many on-market comp agent's to discuss the buyer activity before I put the EMD in on mine

Charles East · Answer

This is how I pull comps: https://qpublic.schneidercorp....

See you your state/county uses gis and do a transaction search.

Doug Smith · Answer

I realize the Bigger Pockets way is very "Do It Yourself", but you really need a great agent that knows real estate investing. Notice I qualified that by saying "knows real estate investing". We're very lucky in that we have a realty practice as well, but I'm super-lucky to have a wife that is not only an agent, but also an investor who has a formal degree in architectural realated design. She's flipped or built scores of homes, so pulling comps to her are a breeze. I know everyone on here wants to do it themselves, but "if you think it's expensive to hire a professional, try hiring an amateur". We do use the MLS and we really look hard to ensure that the comps are truly comps. We ignore "Zestimates" as they're seldom accurate. My opinion...get yourself an amazing agent with experience in real estate investing. Don't get upset when they make money working with you. It's worth it. Good luck to you.

Bob Stevens · Answer

Zillow, just click the sold tab. same for redfin, realtor etc, there all the same.  Before you know it you will not need to pull comps you will just know the values.

All the best

Steven S. · Answer

You know RedFin/Zillow is syndicated with most MLS's, right? I'm curious why you recommend only the MLS for comps, since that is a tool made only for licensed Real Estate Agents to use. It doesn't sound like Kyle is a realtor, rather it sounds like you want him to use one without learning how to run comps himself, which was his request.Sold homes from Redfin out in near you in Belton, TX (for example):

Steven S. · Answer

I can only speak to what I do, but what I've learned is everyone has their own risk tolerance, and that is really where the 'accepted' underwriting methods come from. Some investors would rather underwrite the deal every which way until next Tuesday, and be ok with missing out on a deal should another buyer come in before they fund the deal. Some don't check at all and take a local or the selling agent's word at face-value since they will re-list with them or know them. The big boys club of doing it better than local agents is a façade, look at Opendoor's or Zillow's home-buying & flipping businesses, they almost always have LOST money in their efforts, trying to do this mass-market acquisitions & analysis. I think Opendoor posted a profit finally this year, but very miniscule: https://investor.opendoor.com/...So I second what @Doug Smith said, but it will always be crucial for YOU, the investor/buyer, to run your own numbers to make sure no one is pulling your leg. After all, it is your money on the line!As for how I developed RUNCOMPS, the data comes from free public sources that my scripts clean, format, and join together. The front-end app I provided lets you perform calculations on & make charts from this database, essentially.

Eliott Elias · Answer

The best and only way you should be pulling comps is via the MLS. Use sold, pending & under contract data to gauge what the value of your property is.

Chris Seveney · Answer

@Kyle Soudalan

What we do is we go into Propstream and will look at similar properties in similar condition to get a ballpark idea of what the value is. We will also look at what newer remodeled homes look like to also get an arv if it needs repairs

Once under agreement we do a thorough inspection of the property to get a pre detailed estimate of the repairs of the property and work with a realtor to confirm numbers both as is and ARV.

This is high level of what we do.

Kyle Soudalan · Answer

Thanks for the detailed response @Steven S.! Is that what brokerage and larger investment firms do too? Assuming you write software to scrape these websites to set the filters and then pull the comps, wouldn't you run into issues with their anti-scraping software blocking your IP address after too many repeated crawling of their website?

How does everyone "pull comps"?

Most Popular Reply