Professional Documents
Culture Documents
From Wikipedia, the free encyclopedia Comparables (or comps) is a real estate appraisal term referring to properties with characteristics that are similar to a subject property whose value is being sought. This can be accomplished either by a real estate agent who attempts to establish the value of a potential client's home or property through market analysis or, by a licensed or certified appraiser or surveyor using more defined methods, when performing a real estate appraisal.
Contents
[hide]
1 Comparable Factors 2 Use of Comparables in Appraisals o 2.1 Cost Approach o 2.2 Sales Comparison Approach o 2.3 Income Approach 3 Special Situations 4 Comp Check 5 References
Conditions of Sale -- Did the comparable recently transact under conditions (e.g. -- arms length, distress sale, estate settlement) which are consistent with the standard of value under which the appraisal is being performed? Financing Conditions -- Was the comparable transaction influenced by non-market or other favorable (or even unfavorable) financing terms? For example, if the comparable sold with a below-market interest rate provided by the seller, and if the standard of value (e.g. -- market value) assumes no such abnormal financing, then the appraiser may need to adjust the comparable price by an amount equal to the estimated impact of the favorable financing. Market Conditions -- This is often referred to as the time adjustment and accounts for changing prices over time. Locational Comparability -- Are the comparable and the subject property influenced by the same locational characteristics? For example, even two houses in the same neighborhood may have different views which cause one to be more valuable than the other. Physical Comparability -- This includes such factors as size, condition, quality, and age.
Following is a summary of the cost approach: Market Value of Land + Replacement cost new of improvements - All forms of depreciation + Entrepreneurial Profit = Market Value via the Cost Approach
[edit] References
1. OConnor & Associates is a Houston-based real estate company providing cost segregation & property tax consulting, federal income tax reduction and Commercial Real estate Appraisal services throughout Texas.
1. ^ The Appraisal of Real Estate 12th ed. (Chicago, The Appraisal Institute, 2001) 2. ^ John A. Kilpatrick, "Valuation of Brownfields Properties" in Michael B. Gerrard, Gen. Ed., Brownfields Law and Practice: The Cleanup and Redevelopment of Contaminated Land, pub: Matthew Bender, 2007 ISBN 082053188X View page ratings Rate this page What's this? Trustworthy Objective Complete Well-written I am highly knowledgeable about this topic (optional) Categories: Real estate
Main page Contents Featured content Current events Random article Donate to Wikipedia
Text is available under the Creative Commons Attribution-ShareAlike License; additional terms may apply. See Terms of use for details. Wikipedia is a registered trademark of the Wikimedia Foundation, Inc., a non-profit organization. Contact us Privacy policy About Wikipedia Disclaimers Mobile view