Understanding Comparable Sales

A comparable sale, often shortened to comp, is a home that has recently sold and shares key characteristics with the property a buyer is considering. Comps are the backbone of most value estimates because they show what real buyers in the same market were actually willing to pay.

What Makes a Good Comparable

Not every recent sale is equally useful. A strong comp is usually located close to the subject property, sold within the last several months, and is similar in size, age, condition, and features such as number of bedrooms and bathrooms. A three-bedroom house a mile away that sold two years ago is far less useful than a similar three-bedroom home two streets over that sold last month.

Adjusting for Differences

No two homes are identical, so comps are typically adjusted to account for differences. If a comp has an extra bathroom, its sale price might be adjusted downward when comparing it to a subject home without that feature; if the subject home has a larger lot, that difference is factored in as well. These adjustments are estimates, not precise science, which is why value opinions can vary between agents or appraisers.

Who Uses Comps

Buyers and their agents use comps early in the process to help decide what to offer for a listed home. Later, if the buyer is financing the purchase, a licensed appraiser hired by the lender will independently research and select comps to form their own opinion of value. These two comp analyses do not always match exactly, since the appraiser applies professional judgment and lender-required standards.

Where Comps Come From

Agents typically pull comps from a shared database used by real estate professionals called a multiple listing service. Buyers can also see some sold-home data through public real estate websites, though access and detail vary by location and platform.

Understanding comparable sales gives buyers a clearer, evidence-based way to judge whether an asking price is reasonable and helps set realistic expectations for the appraisal that will likely follow later in the process.