“COMPS” & Prices
A Reality Check…
‘COMPS’ (or Comparisons), are an INSANE measure used to DE-VALUE the sellers price, AND, to TRICK the buyer into believing that the house you are looking at – appears relevant to by comparing it and contrasting it to other properties…
It is s psychological TRICK on the human brain to entice people to buy - - the SAME way that things are almost always priced in ODD numbers AND with the last number being a “9”.
Your brain automatically tricks you into thinking the price is CLOSER to being LOW – more than it is closer than being HIGH.
You buy something for $1.99
Your brain tricks you into thinking it is actually $1 and some change…
So you do not see that 1 more penny, is actually $2
That is ONE of the reasons they use COMPS…
Another important reason is that BANKS will use ‘COMPS’ to evaluate the price of the home you are looking at purchasing.
THEY decide what THEY think the price of the house SHOULD be & they they regulate the RISK of the PRICE vs. YOUR ABILITY to pay for it…
How much RISK they are willing to take, if you can’t pay the loan – to lower the value of the loan.
Which is bogus; because if you fail, they take your house and KEEP ALL of the equity you built up in that house.
Therefore – it is IMPOSSIBLE to use ‘COMPS’ in this neighborhood, because EVERY house is different in its own unique manner. Each house has EVOLVED with every owner and the needs of those owners over time. It is NOT possible to COMPARE house to house in this instance….
Although - - you CAN reflect the VALUE of the house and the properties AROUND the house.
THIS is what we will be talking about and SHOWING you in the following examples.
NOTE:
If ‘COMPS’ were to be used PROPERLY – the ONLY way they could be - - is in a ‘deed restricted’ HOA community. Where every single house must be 98% the same to every other house in that community…
* Grass 3mm to high - - get a fine
* Driveway dusty - - get a fine
* TV too loud - - get a fine
* BBQ smoke offends a KAREN - - get a fine
* Garage Door open more than 3 ½ minutes - - get a fine
* Children laugh too much - - get a fine
* Children wear the wrong color shoes - - get a fine
* Wrong color flowers in front of your house - - get a fine
DON’T pay a fine - - - - they take your house…
OH YEAH - - You are PAYING a MONTHLY fee to the HOA, EVERY month – for this privilege of getting FINED..
THAT - - is exactly where ‘COMPS’ can be used properly and fairly…
YES – in THAT setting, then ‘COMPS’ are an accurate reflection…..
MY Experience:
I rented a house in an HOA in Garden Grove, a LONG TIME AGO. They acted EXACTLY like I outlined above - - for whatever reason, they did. My (first) wife and I were in a war with them, until I played an ACE.
I went out and got an Amateur Radio License (HAM) from the FCC. I bought (the base) of one of those tall radio towers you occasionally see in some neighborhoods – and I INSTALLED IT.
Right next to the house, rising just to the top of the roofline….
Those idiots went NUTS on me and tried everything they could, they even called the police, who just laughed at them when - - I just showed them my FCC license and the Federal regulations that ALLOWED me to install the tower – which OVERRIDES local ordinances and all HOA restrictions – by FEDERAL law.
I swear, their heads nearly exploded like popcorn when they realized they lost.
We formed a truce – they left us alone & I stopped building the tower.
We moved out a few months later…
NEVER another HOA.
H*** to the F no…
