There are so many things to consider with understanding comparable home sales, yet it really isn’t that difficult to understand. You just have to do a little extra home work, to get the true value of a property.
The biggest mistake I see in this market, where people get there comparable sales so wrong, is because you have so many different types of sales going on.
There’s bank owned sales “ugly & pretty”, short sales “ugly & pretty” traditional sales, & investor traditional sellers, who put a wide range of fix up costs, into their properties.
Lets look at where new investors make mistakes & why different types of homes, sell with such a difference in price range, yet it can be a similar house.
1st, Most new investors end up paying too much for a property, which makes for a tight repair budget, & then they can’t give the property what it truly needs.
Also, they tend to cut corners, yet, when they see a few comparable sales from other investor flips, they assume their property will sell close to those comps.
What they didn’t take into consideration, (Which is so Key for Investors, Realtors listing there properties & traditional sellers) is how much money & renovation those investors put into those properties.
IE: An investor who put 15-25k in upgrades, simply doesn’t even come close to an investor who dumped 65-85k+ into a full, completely done renovation.
There is such a huge difference in these numbers & quality of work done to a property.
I recommend digging a little deeper & viewing these comparable sales by doing a quick drive by, viewing them personally, & looking at pictures online.
By doing this it can really help get you a rough idea of how much went into a property.
It Really Isn’t Rocket Science.
Hope this helps with understanding comparable sales. If you have any questions, feel free to comment or send me a message.
Thanks for reading my blog & remember to compare apples to apples.
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