How to Do Comparables on MLS: A Comprehensive Guide
Understanding how to do comparables on MLS (Multiple Listing Service) is crucial for real estate professionals and investors alike. Comparables, also known as “comps,” are a key component in determining the market value of a property. By analyzing similar properties in the same area, you can make informed decisions on pricing, negotiation, and investment strategies. In this article, we will walk you through the process of conducting comparables on MLS and provide you with valuable insights to help you excel in your real estate endeavors.
1. Understand the Basics of Comparables
Before diving into the process, it’s essential to understand what comparables are and why they are important. Comparables are properties that are similar to the subject property in terms of size, location, condition, and features. These properties should have been sold within a specific time frame, typically the past six months, to ensure relevance.
2. Access the MLS Database
MLS databases are exclusive to real estate professionals, but many provide limited access to the public. To conduct comparables, you will need access to the MLS database. Contact your local real estate board or brokerage to obtain the necessary credentials or inquire about public access options.
3. Identify the Subject Property
Start by identifying the subject property you want to analyze. Gather as much information as possible, including the property address, square footage, number of bedrooms and bathrooms, lot size, and any unique features or amenities.
4. Search for Comparable Properties
Use the MLS database to search for comparable properties. Filter your search based on criteria such as location, size, condition, and amenities. It’s important to find properties that are as similar as possible to the subject property to ensure accurate comparables.
5. Analyze the Comparables
Once you have identified a list of comparable properties, analyze their sales data. Pay attention to the sale price, date of sale, and any notable features or conditions that may have influenced the price. This information will help you understand the market trends and determine the value of the subject property.
6. Adjust for Differences
Even with similar properties, there may be differences that need to be accounted for. For example, one comparable property may have a larger lot size or additional amenities, which could justify a higher price. Adjust the sale prices of the comparables to account for these differences and arrive at a more accurate value for the subject property.
7. Calculate the Average Sale Price
After adjusting for differences, calculate the average sale price of the comparable properties. This average will serve as a benchmark for determining the market value of the subject property.
8. Consider Additional Factors
While comparables provide a solid foundation for determining market value, it’s important to consider additional factors that may impact the subject property. These factors include the current real estate market conditions, economic trends, and any recent changes in the neighborhood.
9. Consult with Experts
Lastly, don’t hesitate to consult with real estate professionals, appraisers, or other experts in the field. They can provide valuable insights and help you refine your comparable analysis.
By following these steps, you’ll be well-equipped to conduct a thorough and accurate comparable analysis on MLS. Remember that the key to success in real estate lies in understanding the market and making informed decisions. With a solid grasp of comparables, you’ll be well on your way to a prosperous real estate career.
