Comps, also known as comparables, are a critical tool that real estate agents use to determine a home’s value.
My rule of thumb is this: Comps only have a shelf life of 90 days.
You’re looking for homes that:
- have the same bedroom count (same bathroom count is good but not an absolute)
- have a square footage within 10 percent of the home you’re looking at
The closer to the subject the home is, the better. A half mile is ideal, but don’t go further than two miles.
Look at actives, pending homes and sold homes.
Naturally, we give the most gravity to sold homes because they are the homes that were successfully sold.
Peter Lorimer is the CEO of Beverly Hills, California-based PLG Estates.