Credit gives the word to pay either by repaying it or returning those resources later. In other words, this credit is the method of making the reciprocity formal, legally enforceable, and of course, extensible to a vast group of people who are not related.
However, the resources provided may be financial or have goods or services, like consumer credit. The credit covers any form of deferred payment. Credit generally gets extended by the creditor, the debtor or lender, and sometimes the borrower.
Comparable sales refer to the real estate appraisal method used to determine a property value. In this process, the value of a recently sold property with similar characteristics determines the value of a property.
Factors to consider while conducting comparable sales:
• Comparable Qualities
While making comparable sales, the subject property and the comparable property must be similar.
• Ownership
There should be no difference in ownership matters as such differences may lead to differences in value. For example, if one owner has a fee simple interest and the other has a lease interest, a property will have a different value.
• Conditions of the Market
Another deciding factor in making comparable sales is the existing market conditions. The prices of real estate properties rise and drop in keeping with market trends.
• Location
Location is another crucial factor when comparing two similar real estate properties. Properties near basic infrastructures such as roads, airports, and shopping centers, are of higher value than those located in distant areas.
All parties connected with real estate transactions use real estate comparables.
Use for the Buyers
Comparables help home buyers know how much they will be willing to spend on the property they are looking to purchase. Once they find their interested property, buyers consider the comps in the specific location.
As they get to know what other buyers have paid for a similar property in recent times, they will refuse to pay any amount that is not worth the property they are looking to buy.
Use for the Sellers
Comps help the sellers to set a realistic expectation of the property value they are looking to sell. By analyzing comparable sales, sellers find a more objective way to determine the appropriate value of their house.
Use for Real Estate Agents
Real estate agents rely upon the MLS software to find information about each potential comparable property for comparative market analysis. When making real estate transactions, they need to offer a Comparative Market Analysis(CMA) report to the buyers and sellers.
