When reviewing potential comparables during the research for an appraisal, we are fortunate to have many tools at our disposal. Not only does the MLS provide photos and detailed comments about a property, but we have third-party resources like Google Earth to help us gain an overview of any property. While these tools are great, I also find the importance of discussing a property with the real estate agent to be such a valuable aspect of researching comparables. I often attempt to call and/or text an agent to get some feedback or clarification on a comparable. Many times this is insightful as I gain specific details about the property that may not be so obvious in the MLS.
Here are a few examples of how discussing a comparable with the real estate agent can gain wonderful insight to the comparable:
1) “True” condition of home- MLS interior photos alone can be somewhat deceiving at times. One of the best examples of this is if there is a pet or smoke odor noted on the interior. Unless announced on the MLS, this can’t be observed from looking at a photo. Pet and smoke odors can have a significant impact on the value of a comparable due to the cost to remove such odors. I understand the agent’s perspective of trying to market and sell the property so announcing this in the description section will likely limit a large pool of buyers. I get that and have seen agents comment regarding this in confidential remarks area. In general, I’ve found that it’s important to contact the real estate agent about the final sale or list price if the price seems too high or low compared to competing sales. Usually, there is a reason.
2) Design/Floor plan of home- While two homes may have the same square footage, the design and floor plan can impact a buyer’s preference. In my conversations with real estate agents, I’ve observed that 2-story homes with the 4th bedroom on the lower level vs. all four bedrooms on the 2nd level generally has superior appeal. Also, having a full bath versus a half bath on the lower level often has greater appeal as well. Often times, it’s difficult to identify where the bedrooms are located unless it is discussed in the MLS description area and discussing this with real estate agents can help clarify.
3) Motivation of the seller/quick sell- At times, the seller may be forced to sell due to relocation/job transfer, divorce, contingency date of another home in contract, etc. Because of this, the comparable may be price slightly below market trends to sell the home quickly. It’s important to identify homes that potentially fall into this category so we can put less weight on these homes versus homes with normal exposure and marketing times.
4) Access to the property for viewing- At times, the sales price could be impacted due to the lack of good access for a prospect to view a property. This can happen when an uncooperative tenant is occupying the property and/or when viewing times are limited. When there is a high DOM (days on market), that is a good red flag to contact the real estate agent to determine the reason for this. I’ve found that one of the reasons noted is lack of timely access to the property.
These are just a few examples of the many reasons why we should contact real estate agents. In today’s busy environment, I’ve found that texting and/or emailing an agent to be much faster in trying to gain an understanding about a potential comparable rather than a phone call. Most real estate agents are very quick to respond and provide the requested details, which is greatly appreciated. If you have anything to add or any other experiences, I’d like to hear your thoughts.
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