Real estate comps (comparables) are recent sales of similar nearby properties used to determine a home’s market value. Sellers use comps to set asking prices; buyers use them to make competitive offers; lenders require appraiser-selected comps before approving a mortgage.
What Makes a Comp Useful?
| Criteria | Ideal | Acceptable |
|---|---|---|
| Time since sale | Within 3 months | Within 6 months (12 months in slow markets) |
| Distance | Within 0.5 miles | Within 1 mile (same neighborhood/subdivision) |
| Square footage | Within 10% | Within 20% |
| Bedrooms | Same count | ±1 bedroom |
| Bathrooms | Same count | ±0.5 bathroom |
| Age/condition | Similar era, similar condition | Can adjust for age/updates |
| Sale type | Arm’s-length (willing buyer/seller) | Not foreclosures or related-party sales |
The more criteria a comp meets, the fewer adjustments are needed and the more reliable the value estimate.
How to Find Comps: Methods Compared
| Method | Accuracy | Cost | Best For |
|---|---|---|---|
| Zillow “Sold” filter | Moderate | Free | Quick estimate |
| Redfin sold listings | Moderate | Free | Quick estimate |
| County assessor records | Moderate | Free | Confirming recorded sale prices |
| Agent CMA | High | Free (with intent to list) | Sellers pricing their home |
| Licensed appraisal | Highest | $400–$700 | Mortgage lending, estates, disputes |
| MLS sold data (via agent) | Highest | Free with agent access | Most complete data including interior details |
How Agents and Appraisers Adjust Comps
Because no two homes are identical, adjustments are made to account for differences:
| Feature Difference | Typical Adjustment |
|---|---|
| +100 sq ft vs comp | +$10,000–$25,000 (depends on market) |
| Additional full bathroom | +$10,000–$20,000 |
| Additional half bathroom | +$5,000–$10,000 |
| Garage (2-car vs none) | +$15,000–$30,000 |
| Finished basement vs unfinished | +$20,000–$50,000 |
| Pool (in-ground) | +$10,000–$40,000 (region-dependent) |
| Updated kitchen vs original | +$10,000–$30,000 |
| Newer roof vs 15-year-old | +$5,000–$15,000 |
| Larger lot (+10,000 sq ft) | +$5,000–$25,000 (market-dependent) |
These adjustments are added or subtracted from the comp’s sale price to estimate what the subject property would sell for.
Practical Comp Analysis: Example
Subject property: 3BR/2BA, 1,850 sq ft, built 1998, updated kitchen, 2-car garage, 0.25 acres. Goal: estimate value for listing.
| Comp | Sale Price | Adj: Size | Adj: Garage | Adj: Kitchen | Adj: Time | Adjusted Value |
|---|---|---|---|---|---|---|
| 3BR/2BA, 1,750 sq ft, no garage, original kitchen, sold 4 months ago | $380,000 | +$15,000 | +$20,000 | +$15,000 | +1% | $434,800 |
| 3BR/2BA, 1,900 sq ft, 2-car garage, updated kitchen, sold 2 months ago | $418,000 | −$7,500 | $0 | $0 | $0 | $410,500 |
| 3BR/2BA, 1,850 sq ft, 1-car garage, original kitchen, sold 6 months ago | $395,000 | $0 | +$10,000 | +$15,000 | +2% | $428,000 |
Average adjusted value: ($434,800 + $410,500 + $428,000) ÷ 3 = $424,433
An agent might list this home at $419,000–$429,000 based on this analysis.
Why Your Appraisal Might Come in Low
When a home appraises below the purchase price, it’s usually because:
- The contract price was above market (overpaid)
- Few recent comps in the area support the price
- The appraisal comps were drawn from a slightly different submarket
- Market conditions shifted between offer and appraisal
- The appraiser’s adjustments differed from the agent’s
When an appraisal comes in low, buyers typically have three options: renegotiate the price, pay the difference in cash, or walk away (if an appraisal contingency was included in the contract).
Comps are the foundation of fair market value — the price a willing buyer and seller agree on in an arm’s-length transaction. Buyers use comps to decide what to offer — see making an offer on a house for how to apply comparable sales data in a negotiation. For investors, accurate comps are especially critical — see flipping houses for how the after-repair value (ARV) is estimated.
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