Finding Accurate Comps and Gaining Access to the MLS For FREE

 

One of the main stumbling blocks   people face when starting out in the business is how to find reliable sources for comps. While many investors get a license to have access to the MLS (Multiple Listing Service), it is definitely not necessary to be able to make money in the business.    In this article you’ll learn how to find free, accurate   and reliable   comps.   I will also show  you ways  you can use to gain access to the MLS without a license.

First, it is important to know what a comp is.   Real estate agents and appraisers   use  comparables  to determine the  potential  value  of a house.  They find similar properties that have sold in recent months and   come up with a pretty accurate market value.  A comp is neither   an appraisal nor an average of the highest sold houses.

There is a lot of confusion about this and there shouldn’t be.   There are reliable sources either free  or paid that  you  should  use to find accurate  comps.

It’s true that  MLS comps is the best and most complete source for  finding  accurate comparables, and I encourage  you  to find a way to gain access  to it.   In the end, it is not as difficult as you may think. However,  there are plenty  of  other free resources  online that you could use, such as Zillow.com, Realtor.com

Zestimate

When searching  for comps  on Zillow, don’t pay attention to the Zestimate   because  this evaluation is inaccurate.   Search  instead  for “SOLD” houses that  are not only close to your subject property, but  that  are equal in size  and  layout.   A 1.000sqft house   will always be worth less  than a house   measuring  1500 sqft..  Also,   a Victorian style house  will be priced  differently  to a  twin,  even  if they share  the same size.

First  you have to find the style  and size of the house  by going to the counties  website, or you could you could use   Zillow’s  number.   Since  they take that number from public  sources, it is likely to  be accurate.

Avoid putting generic information on  Zillow. Be  as much specific as possible   and use the filter  to get  the results  you are looking for.  The filter serves  a great purpose. It saves you  tons of  time by  only showing you  the houses that fit your criteria.  Remember to check  ONLY  the “recently sold” box  as  this is the main  criteria  we look for.

 

zillow estimate

 

find accurate cops

 

 

In this example, the house  is a  single family  house, so  it serves  no purpose to choose any other classification  other than the one we want.  Zillow tells us  that our house is 1.344 sqft  in size  which is  aligned with  the county  assessment.

square footage  should be within 150 sqft difference. e.g.

If this house  is  1.344 sqft  only  search for properties  within  150(+-)  difference.

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The more recent  the  sales  the better. 3 to 6 months back in time is customary.  Try not to use comps that  6 months or older . Sometimes  comps  can’t be found in that time frame. In that case, you’ll need to go further back in time.  Because the current market has gotten more stable, we can go back  a little farther than 6 months.   Remember that every market  is different  and  you might  find  markets  that might be going down in value still.

We are looking for the highest  sales that have ocurred within  the timeframe  we searched, because those are the comparables  that will give  you  the ARV (after repair value)..  Once you know the ARV,  formulating the  offer becomes easier.

If comps  can’t be found, it is  always advisable  to use  an appraiser. They could be worth its  weight in gold.

Gaining Access  to The MLS 

One of the ways you can gain access to the MLS is  as an unlicensed assistant.  Some real estate offices   offer this service  for a monthly  fee. Go  to a investor friendly  real estate  office and simply ask.  This is  where  leveraging  your  connections  will be of help.  Any real estate agent  could  help you with  this. Just ask. What do you have to lose?

Another  way  of gaining  access  to the MLS is by offering to pay  the agents  monthly or yearly dues. Having a good solid relationship with the agent first   is crucial. Not everyone  will  accept this, but others  will gladly do it if you send them a lot of business.  You might even  get away with paying anything. Make sure you do send them business in the form  of refferals  if   this is the case.

Ok we learned  how  to  come up with comps  and  we also learned  ways  of gaining  access  to the mls.  If you follow  one   or all  of these  tips   you will find yourself  a comparable  expert  in no time.   I hope this article  help  you overcome this  hurtle  and if you have any questions  don’t  hesitate  to leave  a  comment or recommendation.

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