Understanding Real Estate Comparative Market Analysis (Comps)
A Comparative Market Analysis (CMA), often referred to as "comps," is a crucial tool used by real estate agents, appraisers, buyers, and sellers to determine the most probable selling price of a property. It involves comparing a subject property to similar recently sold properties (comparables or "comps") in the same geographic area. The goal is to identify a price range that reflects current market conditions and the specific features of the properties.
The Math Behind the Comps Calculator
This calculator provides a simplified approach to understanding comps by calculating a price per square foot for each comparable property and then adjusting the value of those comps based on their size relative to the target property. The primary steps are:
Calculate Price Per Square Foot for Each Comp: For each comparable property, we divide its selling price by its total square footage.
Formula: Price Per Sqft (Comp) = Comp Price / Comp Sqft
Calculate Average Price Per Square Foot: We then average the "Price Per Sqft" values from all the comparable properties.
Formula: Average Price Per Sqft = (Sum of all Comp Price Per Sqft) / Number of Comps
Estimate Target Property Value: Finally, we multiply the average price per square foot by the target property's square footage to estimate its market value.
Formula: Estimated Value = Average Price Per Sqft * Target Property Sqft
How to Use This Calculator Effectively
Target Property: Enter the price and square footage of the property you are trying to value.
Comparable Properties (Comps): Input the selling price and square footage of 3-5 recently sold properties that are as similar as possible to the target property. Look for properties that:
Are in the same neighborhood or a very similar one.
Have comparable lot sizes and features.
Were sold within the last 3-6 months.
Have a similar number of bedrooms and bathrooms.
Are of a similar age and condition.
Number of Comps: Indicate how many comparable properties you have entered.
Calculate: Click the button to see an estimated value for your target property based on the comps.
Important Considerations
This calculator provides an estimate. Real estate valuation is complex and influenced by many factors not captured in this simplified model, such as:
Condition and Upgrades: A renovated kitchen or a new roof can significantly increase value.
Location Specifics: Views, proximity to amenities, and lot features matter.
Market Trends: Rapidly changing market conditions can affect prices.
Unique Features: Pools, high-end finishes, or architectural uniqueness.
Motivation of Buyer/Seller: Distress sales or bidding wars can skew prices.
For an accurate valuation, always consult with a licensed real estate professional or appraiser who can perform a comprehensive CMA and consider all relevant market factors.
function calculateComps() {
var targetPropertyPrice = parseFloat(document.getElementById("targetPropertyPrice").value);
var targetPropertySqft = parseFloat(document.getElementById("targetPropertySqft").value);
var compsCount = parseFloat(document.getElementById("compsCount").value);
var comp1Price = parseFloat(document.getElementById("comp1Price").value);
var comp1Sqft = parseFloat(document.getElementById("comp1Sqft").value);
var comp2Price = parseFloat(document.getElementById("comp2Price").value);
var comp2Sqft = parseFloat(document.getElementById("comp2Sqft").value);
var comp3Price = parseFloat(document.getElementById("comp3Price").value);
var comp3Sqft = parseFloat(document.getElementById("comp3Sqft").value);
var compsData = [];
if (!isNaN(comp1Price) && !isNaN(comp1Sqft) && comp1Sqft > 0) {
compsData.push({ price: comp1Price, sqft: comp1Sqft });
}
if (!isNaN(comp2Price) && !isNaN(comp2Sqft) && comp2Sqft > 0) {
compsData.push({ price: comp2Price, sqft: comp2Sqft });
}
if (!isNaN(comp3Price) && !isNaN(comp3Sqft) && comp3Sqft > 0) {
compsData.push({ price: comp3Price, sqft: comp3Sqft });
}
// Ensure we don't use more comps than entered or available
if (compsData.length === 0 || isNaN(compsCount) || compsData.length < compsCount) {
document.getElementById("result-container").style.display = 'none';
alert("Please enter valid data for at least one comparable property and ensure the number of comps entered matches the count.");
return;
}
// Use only the number of comps specified
compsData = compsData.slice(0, compsCount);
var totalCompSqftPrice = 0;
for (var i = 0; i < compsData.length; i++) {
var compPricePerSqft = compsData[i].price / compsData[i].sqft;
totalCompSqftPrice += compPricePerSqft;
}
var averageSqftPrice = totalCompSqftPrice / compsData.length;
var estimatedValue = averageSqftPrice * targetPropertySqft;
// Format currency
var formattedEstimatedValue = "$" + estimatedValue.toFixed(2).replace(/\d(?=(\d{3})+\.)/g, '$&,');
document.getElementById("adjustedValue").innerText = formattedEstimatedValue;
document.getElementById("result-container").style.display = 'block';
}