Posted by Todd_OH on September 17, 2003 at 08:28:51:
Comps consist of RECENT sales, of COMPARABLE (similar sqare footage, # of bedrooms, features, etc.) properties, in CLOSE PROXIMITY to the subject property.
Doing comps is (the most important) part of the appraisal process and, as such, is part art and part science, since an appraisal is merely an “opinion” of value.
Anyway, “recent” is within 12 months. I like to use a proximity of within 1/4 mile of the subject. If necessary, I will go out 1/2 mile. I also prefer to find comps in the same subdivision.
Going down to the courthouse is the HARD, HARD, HARD way (although it is the cheap way). If you are going to commit to the RE business, you should SERIOUSLY (consider) invest(ing) in a software program to do comps. There are two worth looking into…
Criss Cross Real Estate Plus - by Haines Information Systems, 1-800-582-1734
Metroscan - by First American Real Estate Solutions www.FirstAmRes.com
The cost may run from $600-$700 OR MORE annually, but you must simply consider it a NECESSARY cost of doing business. You should NEVER buy a property without having a good idea of what it is worth. The software will provide you with the data to make those decisions. As Robert Allen said in one of his early real estate books… “Until you know value, everything is worthless”
Hope this helps,