Why You Should Ditch the One-Mile Radius Search for Good
For years, agents and appraisers have relied on the one-mile radius search to find comparable properties (comps). But let’s face it—this method is outdated. We know property values can vary dramatically from one neighborhood to the next, yet the practice persists because lenders still ask for it. It’s time to challenge that approach and evolve how we handle property valuation.
Why the One-Mile Radius is Flawed
Just because two homes are within a mile of each other doesn’t mean they belong to the same market. Crossing a single street can land you in a neighborhood with significantly different property values. The one-mile radius method overlooks these nuances, often leading to skewed comps and misguided pricing.
The Solution: Go Beyond the Radius
Instead of relying on the outdated one-mile rule, take these steps next time you run comps:
Visit TopHap.com: This tool provides a visual snapshot of neighborhood price trends. Darker colors represent higher prices, while lighter colors indicate lower prices.
Use a Polygon Search: Nearly every MLS platform in the nation allows you to use a polygon search. Draw your own polygon around the actual neighborhood where homes have similar value trends, rather than using a generic radius.
Print the Map: Before meeting with the appraiser, print a color copy of the TopHap map. Show where the neighborhood boundaries shift by street. This data from a third-party source helps the appraiser to either confirm or rule out certain comps based on visual evidence.
Share This Knowledge
The next time you’re pricing a property or preparing for an appraisal, use this method. Share it with a colleague or someone in real estate who could benefit from more accurate comps. Empowering each other with better tools and techniques elevates the whole industry.
Courtesy of Anthony Young, Appraiser in San Francisco/Bay Area
