Comparable Sales (Comps)

What Are Comps?

Comps — short for comparable sales — are recently sold properties that are similar to the property you're analyzing. They are the foundation of real estate valuation. Whether you're buying, selling, refinancing, or contesting a tax assessment, comps are the primary evidence used to establish a property's fair market value. No tool, algorithm, or gut feeling is more reliable than well-selected comparable sales data.

How to Pull Comps

The best comps meet five criteria. Location: same neighborhood or comparable area, ideally within a half-mile. Recency: sold within the last 3–6 months (use 6–12 months in slower markets). Size: within 15–20% of the subject property's square footage. Configuration: similar bedroom and bathroom count. Condition: similar renovation level and age. The MLS is the gold standard source for comp data; Redfin and Zillow provide less detailed but publicly accessible alternatives. Pull at least 3–5 comps for each analysis.

Making Adjustments

No two properties are identical, which is why raw comp prices must be adjusted. Add value for features the comp lacks (e.g., if your subject has a garage and the comp doesn't, add the estimated value of a garage to the comp's price). Subtract value for features the comp has that yours doesn't. Common adjustment factors include square footage differences ($50–150/sq ft depending on market), bedroom count ($5,000–$15,000 per bedroom), garage ($10,000–$25,000), lot size, pool, renovation level, and view. The adjusted comp prices should cluster around a tight range — that range is your indicated value.

Why Comps Matter

Comps are the language of value in real estate. Appraisers use them to establish official value for lenders. Agents use them to set listing prices. Investors use them to calculate ARV and determine maximum offer prices. Tax assessors use them to establish assessed value. When you present well-researched comps to support your offer price, you gain credibility with sellers, brokers, and lenders. When you ignore comps and rely on estimates or online algorithms, you expose yourself to costly valuation errors.

Practical Tips

Drive every comp in person before relying on it — photos can be deceiving, and you need to assess the neighborhood, street appeal, and condition firsthand. Be skeptical of outlier comps (very high or very low sales) — investigate whether the transaction was arm's-length or involved special circumstances (foreclosure, estate sale, family transfer). For fix-and-flip ARV estimation, your comps should represent the finished quality you're targeting — don't use high-end comps if you're doing a mid-range renovation. Build relationships with local agents who can provide off-market comp data and context about specific transactions.