Posted by Bill K. (AZ) on December 21, 1999 at 19:36:21:
Of course, the best comps are the ones that match the characteristics and features of your target property and it’s neighborhood EXACTLY. However, since this is sometimes not possible, you will then want to open up your parameters very S-L-O-W-L-Y.
I try to stay within + or - 15% on square footage, and, if possible, within the confines of major north/south and east/west streets of that neighborhood. Just walking across a certain street can drastically change your value.
Remember, the wider your parameters, the less accurate your comps.
Obtaining accurate comps can be a difficult problem in neighborhoods where sales are very slow or the home doesn’t fit in with the rest of the neighborhood. In these cases, you’ll have to use your best judgment as to what “adds to” and what “subtracts from” your target property’s value.
I’ve seen homes built in 1993 that are in the middle of homes built in 1926 that aren’t worth any more than those built in 1926. Also, houses with identical features, square footage, elevation, etc. can have radically different values if one of those homes backs up to a major road, store, park, golf course, apartment complex, etc. You get the idea.
Finally, once you’re finished with your “paper” calculation of value, don’t forget to drive the neighborhood in question and view the comps you are using. You’ll ensure yourself that you’ve selected the best properties for your profile.
Here’s the link to a great article on comps from JP Vaughan that might help you also.
I hope this helps.
Bill K. (AZ)