5 Top Strategies for Great Comps
The most time-consuming function in creating commercial appraisals is…comps. Appraisers love comps. However, we hate the time it takes to create great comps. So why not do it better?
5 Top Strategies for Comp Creation
- Always follow a formula
- Identify specific mandatory fields for comp consistency
- Use voice dictation
- Text or email brokers while in Costar to confirm the sale
- QC your comps that all edits are made in the database not in Word doc
The No. 1 strategy is that your comp creation should follow a formula. Readers of your reports find it confusing if your comps (in the same report) vary from one to four pages. This makes sharing comps problematic, as it highlights inconsistency. Going from not enough detail to slightly overwhelming. Find the balance.
Helpful Tip: in the remarks section, follow this format sequence (EVERY time).
- Describe where the property is located
- Details about the property’s physical attributes
- List out the actual seller and buyer not just the corporation or LLC
- Explain why they bought the property
- Summarize the sale transaction and any adjustments
- Sales history
Using a database that allows you to highlight certain fields that require mandatory entry will facilitate comp consistency. Voice dictation will speed up the comp creation time. Data import from data sources seems to be an intuitively efficient method, but erroneous data often costs more time than direct entry.
Trying to confirm with a buyer on the phone is ideal, but its challenging. Rather, reach out to the broker if available. Create boilerplate questions that you can text or email to the broker to automate that process. Make sure it’s brief. Write it as if you would respond to it. Professional, but informal and brief. If you send a wall of words to a broker they usually will not reply. Typical confirmation time with this method is usually instant (though sometimes it’s never).
Lastly, an important strategy is not to allow your appraisers to make edits to the comp while it’s in the Word doc and forget to fix it in your database. Quality control of your comps is of the utmost importance. If done properly, it will reduce errors, provide consistently written up comps for your appraisers to choose from and avoid duplication of input and confirmation.