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A closed sale can be useful evidence
A completed comparable sale is a closed home sale that may help explain the market.
Not every nearby sale is a good match. A useful comparison looks at the home, the sale date, and the ways the homes differ.
Main idea
Look for a good match, not one simple rule
Comparable sales are useful because they show prices that buyers and sellers agreed to in closed deals.
The best evidence often comes from sales that share key traits with the home being studied.
A review may look at:
- home type and location;
- size and floor plan;
- condition and age;
- lot, view, and features;
- building or association details;
- sale date and market conditions.
The homes do not need to be the same. The goal is to ask which gaps make a sale more or less useful.
Distance
The nearest sale may not be the best match
Distance can matter. It is not the only test.
A close home may be a weak match when it differs in major ways:
- home type or market group;
- condition or level of updates;
- view or waterfront setting;
- building or association setup;
- size, age, or location traits.
A sale a bit farther away may be a better match. There is no one fixed radius that works for every home.
Price per square foot
One ratio cannot tell the whole story
Price per square foot can help with one part of a review. It cannot account for every way two homes differ.
Condition, lot, view, features, floor plan, age, home type, building, and association can all affect the comparison.
Do not use a rule that says value always equals square feet times one area price-per-square-foot figure.
Condition and features
The details of the home can matter
A renovated home may not be a close match for a home that needs major work.
Other traits may matter too:
- roof age and overall condition;
- kitchen and bath updates;
- impact windows;
- pool, garage, lot, and view;
- building or association condition.
The cost of an upgrade does not always equal the value buyers may place on it.
This lesson does not set dollar adjustments.
Timing
A sale date can change how useful the evidence is
The market can change over time. An older sale may have closed in a different setting.
Changes may involve:
- the number of homes for sale;
- loan rates;
- buyer demand;
- other homes for sale;
- seasonal shifts.
There is no one age limit that makes a sale useful or useless in every market.
Aha Moment
Closest does not always mean best
The closest sale is not always the best comparable.
A sale a bit farther away may give better evidence when the home type, condition, size, and features are more alike.
Distance matters, but so do the home, its condition, the sale date, its size, its location, and its features.
Professional judgment helps decide which gaps matter most.
South Florida example
Three closed sales can tell three different stories
A South Florida seller owns a renovated three-bedroom home. The seller finds three closed sales.
- Sale A is very close, but the home is smaller and has not been renovated.
- Sale B is farther away, but the size, condition, and features are more alike.
- Sale C sold for the most, but it has waterfront features the seller's home does not have.
The nearest sale is not always the best match. The highest sale is not always the best match.
More than one sale may still help. A qualified professional may weigh the facts and explain which sales fit the review.
The sales are evidence. They do not guarantee a value.
Your learning tool
Use your Seller Pricing Evidence Record
Add each closed sale as its own entry. This record helps you sort facts and questions. It is not an appraisal grid.
You may record:
- the home reference, sale date, and source;
- the sale price when it is lawfully available;
- home type and rough size;
- condition, location, view, lot, or feature gaps;
- why the sale may be a strong or weak match;
- facts, opinions, unknowns, and questions.
Do not make your own appraisal adjustments. Ask a qualified professional which gaps may matter and why.
Ask the right professional
Ask why one sale may fit better than another
Qualified real estate professional
- Which closed sales seem most useful?
- Which home differences may matter?
- Why may one sale be a better match than another?
- How old is the evidence?
- Were any of the deals unusual?
Licensed or certified appraiser
- Which sales were used in the appraisal?
- Which differences were important?
- What effective date applies to the appraisal?
Florida real estate attorney
- Does a sale record raise a legal question?
- Does a contract or disclosure issue need legal review?
Knowledge Check
This is not a test. No grades. Take your time.
Today's Action
Compare three closed sales
Add three completed sales to your Seller Pricing Evidence Record.
For each sale, list one way the home is alike and one way it differs.
Then ask how that gap may affect the sale's use as evidence.
Fair-housing boundary
Use facts about the home and market
Do not use race, color, religion, sex, familial status, national origin, or disability to choose comparable sales.
Do not use protected-class data or coded neighborhood terms as a comparison factor.
Professional boundaries
Know where this lesson stops
This page does not provide:
- a value for a specific home;
- an appraisal;
- appraisal adjustments or fixed adjustment tables;
- a fixed radius or fixed age rule for comps;
- a guaranteed list price or sale price;
- contract advice or protected-class analysis.
Review market evidence with a qualified real estate professional.
Ask a licensed or certified appraiser about appraisal work.
