Comparable Sales Analysis: A Complete Guide

Step 1: Subject Property Analysis

Before searching for comparables, complete the Subject Property section thoroughly. This creates your baseline for comparison. Pay special attention to:

• Quality/condition ratings using the 1-5 scale provided
• Exact square footage from assessor records
• Lot size and utility
• Actual age and effective age if renovated
• Location characteristics

Step 2: Comparable Search Parameters

Use these initial filters in MLS:

• Within 15-20% of subject’s square footage
• Similar style/design
• Similar age range (typically ±10 years)
• Sales within past 6 months
• Similar location characteristics
• Similar lot utility

Step 3: Initial Screening

From your initial search results:

1. Pull 5-7 potential comparables
2. Complete basic data in grid for each
3. Eliminate any with:
   • Non-market sales conditions
   • Significantly different quality/condition
   • Different highest and best use
   • Incomparable locations

Step 4: Detailed Analysis

For remaining comparables:

1. Complete verification checklist
2. Document superior/inferior features
3. Note significant differences requiring adjustment
4. Rate overall comparability (1-5 scale)

Step 5: Final Selection

Choose your best 3-4 comparables based on:

1. Fewest adjustments needed
2. Most similar characteristics
3. Most recent sales
4. Most reliable verification

Common Pitfalls and Solutions

Problem: Focusing Too Much on Price per Square Foot

Solution: Use the worksheet’s comprehensive comparison grid to evaluate all features, not just size.

Problem: Over-Reliance on Proximity

Solution: Complete the location analysis section to ensure true neighborhood compatibility.

Problem: Missing Transaction Issues

Solution: Use the verification checklist for each comparable to identify non-market conditions.

Problem: Insufficient Documentation

Solution: Complete superior/inferior analysis for each comp to support your selections.

Special Situations

Limited Sales Data

If you must use sales over 6 months old:

1. Document market conditions
2. Note any significant market changes
3. Consider paired sales analysis for time adjustments

Mixed-Use Areas

Additional considerations:

1. Verify zoning compatibility
2. Check highest and best use
3. Consider only similar use properties

Unique Properties

When the subject has unusual features:

1. Expand search parameters
2. Document market reaction to features
3. Consider paired sales analysis for unique elements

Professional Tips

Documentation Best Practices

1. Photos of all comparables
2. MLS sheets retained
3. Public record verification
4. Notes on market conditions
5. Maps showing relative locations

Working with Appraisers

1. Provide complete worksheet
2. Include verification details
3. Document any unique market conditions
4. Note any special financing terms
5. Highlight any significant market changes

Understanding Market Dynamics

Market Conditions Analysis

Track and document:

1. Days on market trends
2. List price to sale price ratios
3. Inventory levels
4. Price trends
5. Financing changes

Neighborhood Analysis

Consider:

1. School district changes
2. Development patterns
3. Zoning changes
4. Infrastructure improvements
5. Economic influences

Using the Superior/Inferior Analysis

Purpose

• Document specific differences
• Support value conclusions
• Identify adjustment patterns
• Demonstrate market knowledge

Implementation

For each comparable:

1. List superior features
2. List inferior features
3. Note market reaction
4. Document support for conclusions

This guide accompanies your Comparable Sales Analysis Worksheet. Together, they form a comprehensive system for selecting and analyzing comparable sales.

Want access to our “Comparable Sale Toolkit” worksheet? This is a great companion document which will really support your research and help you to establish effective list prices.

To get access to the toolkit, click here.

Using the Worksheet Effectively

Final Reconciliation

Use the worksheet’s reconciliation section to:

1. Identify most reliable comparables
2. Support value conclusions
3. Document decision process
4. Explain any unusual circumstances
5. Support final value opinion

Remember: The worksheet is designed to guide your analysis and document your conclusions. Complete all sections for best results.

This guide accompanies the Comparable Sales Analysis Worksheet provided by: Agents Advantage Real Estate Academy www.agentsadvantageacademy.com Email: tammy@ctappraiser.com