ARV from Property Radar

[Carlos O.]

Hi everyone,

I just have a quick question regarding the comps and market values that Property Radar provides. How accurate are the comps there? How accurate is the market value shown on a property? Specifically, I'm looking in LA and Orange county.

[Sean OToole]

@Carlos O. the comps we offer come from the county recorder and are the official records for your area.

@Christophe Soldat yes some MLS's, do offer official public records access in addition to MLS records (real estate agent entered data), but you don't need a license for public records. I actually think both have value, but there are differences. For sales comps the biggest advantage of public records is that they will include non-MLS transactions.

Everyone should keep in mind that value estimates like ours or the Zillow Zestimate (known in the industry as automated valuation models, or AVM's) are based on public records data and therefore don't take into account things like curb appeal, view, home condition, landscaping, etc. Most can't even tell the difference between oceanfront homes, and the homes on the other side of the street.

Despite these shortcomings estimated values are still a super helpful starting point. Just realize they will work better in subdivisions of identical homes with lots of recent sales then they will in highly mixed neighborhoods with big differences between homes.

In terms of determining ARV for a property, here is my process:

1. Start with the estimate - is it even in a ballpark that works for me?

2. Next move to comps - sales comps are the most important, that is what appraisers and the market in general uses. But I also look at listing comps (the competition and/or what's not selling if high days on market), foreclosure comps (any foreclosures nearby that could have an impact), and neighbor comps (is this property overbuilt or underbuilt for the area).

3. Get in my car and go look at both the subject property and the sales comps I selected in step 2. Lots of people want to skip this step, but public records data, and even MLS data, just don't replace seeing property, and what's around it, in person. You just can't rely on pictures these days, especially with all the amazing wide angle lenses that are now available cheap. :-)