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neighborhood of the subject property we’re evaluating. Going across town doesn’t work well. There are some other require- ments, such as: Try to stay with the same number of bedrooms. Don’t % get four bedroom comparables to value a two or three bedroom home. Use the same number of bedrooms. The same is true for bathrooms; try to stay with the same % number or at least within a half bath. Use the same type of homes. Don’t compare a two-story % Victorian with a single-story ranch. Stay within 20% of the square footage. In other words, % if the home you’re valuing has 1200 square feet, don’t use comparables more than 20% bigger or smaller. So you would stay between 960 square feet and 1440 square feet for comparable “ sold ” properties that you are using for your own comparison. You can get your real estate agent to help you by running the comps for you. However, you need to know how to do this so you can at least check the comps. Real estate agents make mistakes, and they don’t know everything, so you need to be your own expert. Remember the quote often used by President Reagan “ Trust, but verify. ” Use the Comparables to Value Your Subject Property and Determine the Numbers for each type of Buyer in your Bucket When you evaluate a property you have to be able to run the numbers to determine if it is a great deal. You run the numbers whether you are planning on buying the property or you have an end buyer in mind that might step in your shoes once you have control of the deal.
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