Once your lead sheet is complete and you’ve gotten a sense for what the seller is looking for, it’s time to decide if it’s a deal or not. The way we do this is by running comparable sales aka “comps”.
These are houses that are similar in size and style to the one you are evaluating. To get the most accurate comps, you want to use the MLS (Multiple Listing Service). They have the best comps for what has sold over the years. I like to use houses that have sold within the past 90 days, but sometimes you might have to go back a little further. If you are not a licensed realtor and do not have MLS access, there are a few other ways to get comps.
Other sites that provide free comps are:
- cyberhomes.com
- eppraisal.com
- zillow.com
- realestate.yahoo.com/re/homevalues
- realquest.com
- realtor.com
- Freedomsoft
These sites are not the final determination the as-is or ARV, but only for quick reference purposes. The MLS is the best and most accurate way to go. Get a local realtor to run some comps for you. I recommend that you try and get access yourself because every once in a while, you need your comps right away and a realtor could take a day or two to get back to you. As I mentioned before, good deals and motivated sellers don’t wait around, so you have to move fast.
When pulling comps, I usually try to go with the lowest comps comparable to my property. This way I can protect myself and not think that my property will be worth more than it actually is.