The home you buy is probably one of the biggest decisions you’ll make in your life, both financially and personally. You’ll likely be spending the foreseeable future in your new home, and will have to shell out several hundred thousand dollars to close the purchase. However, one thing that can help make your decision a little easier is price comps. Comps are sales records of recently sold homes, allowing you to get a better feel of the market and make a smarter financial decision. So before you break out that house payment calculator, take a look at price comps for various listings. You might be wondering how price comps work and how they affect your search for a home, something that can be easily answered. Let’s take a look at how price comps work and how you can use them to your advantage when buying a home.
Location
The first thing that goes into a price comparison is the location of a home. Location is a huge deal when it comes to buying a home, and it is a major factor in a home’s value. If a home is located in a good school district and is close to various amenities like shops, restaurants, and hospitals, it will likely have a high value. Alternatively, homes in bad school districts or have to deal with noises from the highway or railroads may have their value tanked. However, homes that are in a similar location usually have similar values. As a result, looking at price comps for a specific area can allow you to get a sense of what a home is worth and allow you to get a headstart when it comes to negotiating and bargaining.
Age
Another important part of a house comp is the age of the home. Homes can last a long period of time, however when they age, they begin to deteriorate. Older homes can have many problems, including a deteriorating roof, leaky pipes, and structural wear and tear. Just because a home is old doesn’t mean that you’ll encounter these problems, but it does make it much more likely. As a result, older homes will likely be cheaper on the market than their newer counterparts. If you’re able to find a price comparison for homes of a similar age, you can get a pretty good idea of how much a home is worth.
Size
Something else that you’ll likely want to consider when searching for price comps is the size of the home. Homes with similar sizes will likely command similar prices on the market, simply because similar-sized homes have similar offerings. When comparing the size of a home to another, there are several things you need to look at. First is the square footage, as homes with a similar amount of square footage have a similar amount of space available. The next thing you need to look at when comparing size is the number of beds and bathrooms in a home. Bedrooms and bathrooms are extremely important in a home, and if you’re doing a price comp, then it should be with another home with the same exact number of bedrooms and bathrooms available. Size is extremely important in a home, and homes with a similar size will likely sell for around the same price on the open market.
Condition
One other thing that you need to consider when making price comps is the condition of the home. The condition can be related to age, but it doesn’t always work out like that. A home can be very old, yet have lots of renovations done to improve its conditions. Alternatively, a newer home could have been treated very poorly by its previous owners, causing the home’s condition to deteriorate. Although age may be a factor in the condition, you still have to analyze each factor separately to get an accurate comparison between two homes. The condition of a home on the open market is extremely important, and you definitely need to factor it into your research when conducting price comparisons.
