Where do you run your comps?

Question

I'm new to the RE business but one thing I've found is I'm having difficulty finding reliable comps.

Where do you run your comps?  Are Zillow and Trulia worth bothering with?
What criteria do you use?  Distance, when it was sold etc?

My problem seems to be I can't find true comps.  Lets say I am looking at a 3 bed 1 bath, I might find 4 sold in the last year, and 2 of them will be 2 bed or 4 bed or they're over a mile away.  I don't think they're really reliable enough to do the math.

Any advice would be great!
TIA

Will Barnard · Answer

Here is how you do it. Type in address of subject property, when screen pops up with map, click on active and sold check boxes on left hand side. then you have the option to add filters such as 90 days back, 6 months back, bed/bath mixes, etc. AFter you have selected your filters, only those within your criteria will show on the map, reds as the actives, yellow as the solds. You can plainly see if a comp is too far away or on the "other side of a river" by looking at the map, noticing the location of the subject property compared to the comp property. By clicking on any of the solds or actives, you can then pull up the dteail page screen on that property and see phots (if available, previous public recording records, home data (size, lot size, year built, etc). The bad thing is that there could be some brand new comps that are not yet showing on Zillow as they are not up to date exactly, it may take a few days or even a few weeks for some to register on Zillow. They also may have dtat that is incorrect. For instance, I have seen on Zillow specs showing a 3 bed 2 bath home, when i fact on title, it is a 4+2 (as an example) so you still must verify that the data you are looking at is accurate, but it is a decent resource for some quick snapshots into comps available for free.

Will Barnard · Answer

The ONLY way to comp a property is to pull actual comps. Now, you can get those on Zillow, just use the sold data only and ignore "zestimate values". Real sold comps can be found through RE agents and title companies, so you either need to gain direct access or have a relationship with someone in that field who will provide them to you.

Lastly, comping property is an art form and you need to know how to make adjustments for bed/bath differentials, square footage differentials, and locations. If one comp resides on a busy street, you need to know how to adjust for that.

As far as appraisals go, it is most common that only the last 90 days count these days, however, in some areas and instances, that is impossible to get enough so often you will have to go out 120 days or even 6 months. A comp from a year ago does not count, but as Brian stated, it does help paint a picture for you where your market is going.

Andy Chu · Answer

Short of going to a real estate agent to do a BPO, everything else is a rough guess. If you want to smooth out your guessing work you may try yahoo's online valuation. They use both zillow and Eappraisal (2 is better than 1).

http://realestate.yahoo.com/Homevalues

Ultimately, there is a reason why very few banks use AVMs (Automated Valuation Models) for lending. I saw Wells Fargo do it once and I believe their number was off by 30K on a 250K house.  The number is not accurate and does not take into consideration condition of the house.

Brian Levredge · Answer

I use the MLS.  If you are going to be using a realtor to sell your properties, they shouldn't have a problem giving you access (spare me the argument about ethics).  Of course that is something that needs to be built up to.  A realtor generally won't just give you access.  As far as doing the comps, I look last six months and within a half mile.  I actually look at the last year's comps to get a better indicator of what direction (if any) that prices are moving.  For instance, if there are some solid comps within the last six months, I want to look further back to see if they were selling for more.  If prices are declining in your sub market, you need to build that into your costs and account for the risk.

Bill Gulley · Answer

Location, location, location! I'd rather have a 9 month old comp in the same neighborhood than a sale last week of the identical floor plan accross town. I suggest you use the MLS and make friends with a Realtor. I have looked properties up on Zillow and they were off significantly, I'd never use it.

Ideally you'd have 2 in the neighborhood and one close by, but it's not a perfect world. Location trumps, then size/style and age/amenities. You might find 5 or 6 in a 3 mile area and then select the best 3 or even 4 as most like the subject. A fireplace, additional bedroom or anoueth half bath are pretty mechanical for the analysis.

Adjusting for location is harder to catch on to as it requires knowledge of the general area and market trends of hotter areas. This is where the art of appraising really shines knowing how the market identifies areas. And do your best when looking at condition.

A recent listing of a 2/2 1'2 @ 305K in a sought after established area seemed high until you find out the 1957 home was completely updated with high end materials and fixtures. Look at old comp listings for remarks and a call to an agent to ask the condition might be a good idea too. It's in very good condition!

Steve Babiak · Answer

Zillow does show actual solds.  They do not rely just on the MLS - they will include non-listed transactions as well (like sheriff sales and FSBO).  There is still the issue of whether the solds that Zillow shows really can be considered comps.  For example, one of my favorties is that Zillow will take a house on one side of a river and call a house on the other side of the river a comp - doesn't matter whether they are in different school districts, that the nearest bridge is over a mile away (so you have to drive 2 miles to visit the house on the other side of the river), doesn't matter that the neighborhoods differ, doesn't matter that the type of house is different.

You have to understand more of the "why" when it comes to Zillow and the bashing that Zillow sometimes receives.  And I will use Zillow to help find comps (notice I said "help").

Marcus Mclaurin · Answer

Hey @Michael Quarles , could I take you up on that offer of National Access? Any response would be greatly appreciated.

Jay Neaves · Answer

Thanks Tod R. and thanks for your input.

For me (and it maybe just that I'm relatively new to RE) Zillow doesn't give true comps.  This was the reason for my question.  The points that Steve Babiak made are exactly what bothers me about it.  The comps are not really comps because it doesn't take account of  a lot of really basic factors.  For example, I was looking at a 3/3 house, the comps returned were minimal (nothing within 3 months) and some were geographically close but the house I was looking at was 1964, the comps were 2003 builds.  Some were 2/1's???

There has to be a better option for the comps!

Tod R. · Answer

Bill Gulley and Will Barnard  I've never looked at Zillow based on what I've heard.  I've just always had a realtor pull comps through MLS.  Will, are you saying that now Zillow will show actual solds?  Do they get their info from MLS, and do you think it's complete?

BTW, Jay Neaves welcome to BP!

Jay Neaves · Answer

Thanks everyone.

Will Barnard - I guess learning the science behind it is what I'm hoping to do, but I am really struggle to find sold comps in the first place for some properties particularly within a 3 month, half mile criteria.

Michael Quarles - thank you!  I wondered if perhaps I was just looking in the wrong places.  Access to the MLS would definitely make life easier for me to start working these deals through!

Where do you run your comps?

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