Comparables In Real Estate
Definition of "Comparables in Real Estate"
The term comparables is used to better determine the value an asset has when compared to others, similar to it. Real estate comparables are used in assessments to determine a house’s fair value. A list of recently sold properties, usually within the last year, in a specific area, are considered by the assessor to assess the value of property properly.
Why are comparables used in real estate?
In the real estate market, comparables help a real estate agent to assess the value of a home. Looking at the most recent home sales, real estate agents better understand how properties are evaluated in an area and what the market trend is. The real estate comparables need to be comparable to the property in discussion - needs to have the same number of bedrooms, floors, bathrooms - with similar attributes as the property they represent. Usually, real estate agents look at an area of one mile around the property they evaluate at homes sold for no longer than a year to date. Typically, they use around three comparables to determine the asking price of the property assessed accurately.
During assessments, the assessor also compares the property that they are assessing with comparables. This, similarly, helps them to evaluate the value of the property as well as other determining factors. This value is used for tax purposes by municipalities or local governments to establish the proper property tax for the property.
When do we use comparables in real estate?
In the lack of a real estate agent, a property owner can sell their home through a for sale by owner scenario. The best option would be to have a real estate agent, but a home seller can research these prices online since property sales are made available to the public. A home seller can search online for homes similar to the one they are selling for an accurate price. Simply put, comparables are properties similar to the subject property used to estimate the property’s value.
Popular Real Estate Terms
Legal order for a person to present at a deposition or trial documents in his possession, such as related to a real estate transaction. ...
When a real estate owner wants to know what their property tax liability is, they calculate the assessment ratio for their property. An assessment ration is a relationship between a real ...
Removing a debt by making full payment. A mortgage discharge is a document formally specifying that a mortgage debt have been paid. It is typically recorded in a local property deeds ...
An increase in the income tax basis of a property that is a result of a tax-free exchange. As a result of an inheritance, for example, the basis of the inherited property was stepped up to ...
City apartment building that is overcrowded, poorly constructed or maintained, and generally part of a slum. In law, a tenement also refers to possessions of an individual that are ...
The meaning of a development impact fee or impact fee defines a one-time cost the local government imposes on a brand new or planned development project (regularly on a property developer.) ...
Limited period of time granted by state law to an individual who has had his or her property foreclosed on and sold to regain possession of the property by repaying the debt that was ...
New cost less accumulated depreciation to date. ...
The meaning of the term tort outlines a wrongful act resulting in injury or damages. For example, trespassing on someone’s private property can end up destroying a part of it. ...
Have a question or comment?
We're here to help.