If you have ever been involved in Denver real estate, whether as a buyer, seller, investor or simply interested individual, then you’ve likely heard the term “comps” before. Denver comps, or comparable sales, refers to the homes located in the same area as the one you are trying to either buy or sell, that are also similar in size, condition and features. Buyers rely on comps to figure out how they should price their offer on a home, and sellers use them to come up with the best price to use when they list their home. Real estate agents look at Denver comps every day to stay on top of the market, and whether you are a buyer or seller and are working with or without an agent, it’s helpful to have a solid understanding of how to read and analyze Denver comps.
Location, Location, Location
In order to figure out the value of a Denver home you will need to look at nearby homes. The real estate market is largely based on location, if you were to look at the price of a one-bedroom apartment in New York City and one in Boise, Idaho you can clearly see what an impact location has on the value of each home. The most accurate value comparisons come from Denver homes that are located within the same neighborhood as your own. If you aren’t able to find a good selection of comparable homes, then slowly expand the size of your search. It’s important to establish boundaries for your search; however, consider limiting the size of your area by factors like school district, township, city or zip code.
Timeframe is Important
The best Denver comps are homes with a current status of “pending,” because a pending home is a live piece of market data. A pending status means that a buyer and a seller have made a deal, which reflects the recent available stats on the market. Any quality real estate agent should have a robust network that they can leverage to obtain an accurate amount for what the ultimate price or price range of a pending deal is. Try to limit your sales data to information that is at most three months old.
Pay Attention to Feature Details
Once you have established a location and a timeframe, it is important to look for homes with similar features to your own; for an “apples to apples” comparison, look for features such as the same number of bedrooms and bathrooms as yours, as opposed to trying to compare something like price per square foot. Features like a home’s view, the condition of its kitchen and whether or not it has a finished basement will play a considerable role in the determination of its value.