Need some help running comps?

[Patrick Philip]

Hello everyone. I hope everyone is well. So I'm back trying to educate myself how to run comps again. I downloaded and read J. Scott's guide and am trying to follow it to a Tee. One thing that really helps out is that Zillow has a tool that allows you to draw a circle around a given location. I can use this in conjunction with Google Earth to get distances very accurate. I have an Excel spreadsheet set up to put in all the information. I still have a few questions and would be grateful if anyone would take the time to respond:

1. There are a few outliers. Such as a 1200 SF house that sold for $25,000. What's that about? The only pictures it has are of the exterior and it just looks like a normal house. Is the inside all torn up? Or was this someone selling a house to a family member for next to nothing? The pictures on Zillow don't always give enough information to be able to look for similar finishes or adjust for different finished. There are some like this that are more obvious, like a 1480 SF 3/1 that sold for $30,000, but you can see in the pictures that the windows are boarded up. I would assume that something like this is not even worth adjusting for, and I should just not include it. Am I right?

2. The house I'm trying to compare to was built in 1935. (I will never do another house this old, by the way). I was told (by someone other than J. Scott) to only include houses built within 7 years of the subject property. But since this house is so old, would it be okay to go as far back in age as possible. This is near a historic district and some of the surrounding houses were built in 1910, 1905, etc. Surely, there's not as big of a difference in value between 1910 and 1935 (25 years) as there is between 1970 and 1995 (also 25 years). Should I just call this house OLD AS HECK and compare anything else that is also old as heck?

3. How do I know what to adjust for if there aren't good enough pictures on Zillow?

4. The guide written by J. Scott mentions that adjustments can differ by area. How do I know how much to adjust for in MY area?

[Bob Okenwa]

Running comps is more art than science and there is no single formula to adjust upwards or downwards as every market has its own norms and the same can be said for sub-markets within that market. 

I am no expert on Florida or Winter Springs, so I cannot give you specific advice on what to adjust for in your area without spending time learning that area. To get a good eye for comping properties, it takes time and patience. There are other sites to use for finding pics such as Realtor.com, Redfin, Trulia, etc. Although I am a Realtor and have access to the MLS and can see old listings, I have seen that Redfin has been pretty reliable as a #2 option.

All in all, you want to compare properties with as many similar features as possible and be aware of the obvious outliers, with the main culprit being size difference (You really don't want to compare a 3000 sq. ft. house with 3 bedrooms to a 900 sq. ft. house with 3 bedrooms). Age difference are something you have to be aware of but not dismiss outright. A 7 year difference is nothing and you should be comparing that with the subject property. In my area, there are brand new homes down the street from homes built in 1995. Every area is different and you just have to be mindful of the nuances of your local area.