When do properties on the market become comps?

[Joseph Matarazzo]

I have a multifamily property (3 units) which I am considering refinancing. In the past, I have not refinanced because there were no good comps in my area to show the value of my property. Recently, two houses on my street went up for sale and are now under contract. Should I wait until these other two properties close completely before going for my appraisal? Or can I tell the appraiser that there are these two possible comps now? 

House 1: 5 units (10 bed, 5 bath) listed for 700,000

House 2: 3 units (8 bed 4 bath) listed for 640,000

My property: 3 units (9 bed, 3 bath). 

Any and all advice or feedback would be helpful here. I'd like to appraise soon, but want to make sure that comps like these are able to be used since they will help appraise my homes value at a higher level. 

[Scott Ashworth]

@Joseph Matarazzo properties become a comp after the sale is completed. This happens mainly because the Contract Price may not become the Sales Price. Once the Buyer reviews the Inspection Report or Rent Rolls or other processes during the Due Diligence Period, the Price can (and often does) go through another round of negotiations. 

For properties with 4 or fewer units, comparable sales are used to determine the value of a property. For properties with 5+ the Cap Rate is used. For this reason, House 2 will be a comp for you, whereas House 1 will have a value derived from different criteria, and will therefore not be a comp. 

Here is an article I read on BiggerPockets a year or so ago. It was very helpful - it lays out the benefits and how the value of 5+ multi-family is determined https://www.biggerpockets.com/...