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Analyzing Comparable Sales

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If the home you are interested is part of a development, then you will most likely find some exact model matches to compare against one another.  There are three main sources of information on comparable sales, all of which Buyer's Edge Realty has access to.  It is somewhat more difficult for the general public to access this data, and in some cases impossible.  Two of the most obvious information sources are the public record and the Multiple Listing Service.

Determining your offer price is a three-step process. First, you look at recent sales of similar properties to come up with a price range. Then, you analyze the condition of the home and home improvements made to the property. It is important to consider current market conditions and the circumstances of the seller, if you can get the information. A motivated seller is likely to be more flexible during the negotiating process.

Comparable Sales in the Public Record

The most accessible source of information on comparable sales is the public record. When someone buys a home the property is deeded from the seller to the buyer; the deed is recorded at the Westchester County recorder’s office in White Plains. They combine sales data with information already known about the property so they can assess property taxes correctly.

Provided there have been no additions to the property, the information available from the public record is usually correct regarding sales price, square footage and numbers of rooms. This makes it easy to use the public record as a source of data for comparable sale information.

Accessing the data is another matter, at least for the general public. Realtors can generally look up this information through title insurance companies. The title companies either compile the data directly from the county recorder’s office or purchase it from other companies. One problem with the public record is that it tends to run at least six to eight weeks behind. Add another four to six weeks for the typical escrow period and you can see the data is not current. The most current information is the most valuable.

Comparable Sales in the Multiple Listing Service (MLS)

Most of the public is aware that the Multiple Listing Service is a private resource where Realtors list properties available for sale. Recently, the public has been able to access some of that information on such sites as Realtor.com, MSN HomeAdvisor, and others. Buyer's Edge Realty offers buyers online access to all properties listed with the Westchester Multiple Listing Service.

Once a property is sold and the transaction has closed, the selling price is posted to the listing in the Multiple Listing Service. Over time, it has become a huge database on past sales, containing much more information on individual homes than can be gleaned from the public record. Buyer's Edge Realty will provide you with access to this data to help determine your offer.

Comparable Sales - Pending Transactions

The most valuable information is the most current, of course. A sale last week has more validity in helping you determine a purchase price than a sale from six months ago. The problem is that there is no actual record of the sales price until the transaction is completed. The information is not available in the public record because no deed has yet been recorded.

Neither is the information available in the Multiple Listing Service. Once contractual contingencies have been satisfied and a mortgage commitment issued, it becomes a "pending sale".  Actual selling prices are not posted until it becomes a "closed sale." This protects the seller in case the transaction falls apart and the property is placed back on the market. It would give an unfair advantage to future potential buyers if they already knew what price the seller had been willing to accept in the past. However, Buyer's Edge Realty is sometimes able to learn the sales price for pending transactions through professional courtesy.

Next Topic - Evaluating Property Conditions