Terms for investments are everywhere in real estate. You may hear lenders,
agents and brokers talking the real estate jargon. If you are finding a way to
be a part of the real estate world for any type of investment, you will want to
be familiar with the different terms that are used in real estate. The first one
to identify is comparable sales.
Time and again, comparable sales will be termed as comps. These will be the
foundation of your real estate investment and are important to know. If you are
looking at a property, always ask what the comps are on the property. Your real
estate agent, or you, will then research a variety of factors to compare your
property with the others around it. You can find these through various
companies, the multiple listing service, (MLS), and even courthouses and
newspapers.
Some of the comps to take account of are the history of the property, the sales
from the past, the sales of the other homes, the demographics of the area, and
the different trends that have affected the sales. Anything that will affect the
investment that you are prepared to make on the home is what you will need to
look up when considering comps.
Why is it important to look up the comps. By doing this, you will know whether
you are making the right investment or not. Technically, the value of the home
should go up. At the same time, the value will need to be the same as the other
homes. If you don't have a balance between the historical investments and the
neighborhood investments, you could end up spending too much.
When looking at cash flow, you should always begin with the comparable sales.
This will give you a good idea about what is happening with the real estate that
you are interested in and whether it is worth your time and investment. Finding
the comps is the start to moving over the threshold and into your new home.
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