Determining ARV/Using Comps

[Cierra Seay]

What exceptions do you use when determining ARV ? In a perfect world we would love to use homes with the exact same square footage, bedrooms, baths, architectural style, etc. but sometimes we have to make exceptions and make a decision. Just wondering what are some things you are willing to compromise on and what things have to be the same in order for you to use that property as a comp ? Looking forward to your responses.

[Andrew Syrios]

The biggest things that I look for are:

1. Location (how close, preferably in the same subdivision, no more than a mile away + similar neighborhood)

2. Sale date (last 6 months usually)

3. Age (within 10 years if possible, no more than 20)

4. Bathrooms 

5. Square Footage

6. Amenities (basement (finished/unfinished?), garage, large lot, etc.)

7. Condition (look at the pictures if you have access to the MLS)

8. Foreclosures (In most areas, there's a big difference between the price foreclosed properties sell at and the price that privately owned properties sell for, so I usually take out the foreclosures)

All of these have wiggle room. If I have to, I will go further away for comps, maybe compare a 1 bath to a 1.1 bath (and make an adjustment), simply make adjustments for square footage, garages, etc. And with the exception of 2 bed and 3 bed houses, I'm usually willing to compare say a 3 bed, 2 bath house to a 4 bed, 2 bath house.