What Is Comparable Sales?
Comparable sales, or comps, are recently sold properties similar to a subject property in location, size, age, condition and features. Appraisers, agents and investors adjust comps for their differences to estimate the subject property's market value or, for a renovation project, its after-repair value.
Comparable Sales in plain English
Comps are the recent sales that best match the home you are valuing: same area, similar size, age, layout and condition, sold recently. Their prices are the best evidence of what a buyer would pay.
Because no two homes are identical, each comp is adjusted up or down for its differences - an extra bathroom, a garage, a renovated kitchen - before the values are reconciled into one estimate.
Why it matters
Comps are the primary data source for estimating a property's current market value or, for renovation projects, its after-repair value (ARV).
What it means for you
What buyers should know
Ask your agent for the comps behind a suggested offer price.
What investors should know
Use renovated comps for ARV and as-is comps for the purchase price.
Common mistakes
- Using active listings instead of closed sales.
- Choosing comps from a different neighbourhood or school district.
- Using only the highest sale to justify a price or ARV.
Compare and common questions
Comparable Sales: frequently asked questions
How many comps do I need?
Appraisers typically use at least three closed sales, and more when the market is varied. Recent, close and similar sales matter more than quantity.
How recent should comps be?
As recent as possible, often within the last few months. Older sales may need adjusting for market changes.
Where can I find comparable sales?
Through an agent's MLS access, public sale records or a comparative market analysis. Check details such as condition, which records may not show.
Where it fits
- Buying a home, Offer & Negotiation: before this, Backup Offer; next, Seller's Market.
- Investing, Deal Sourcing: before this, Gross Rent Multiplier; next stage, Acquisition: Cap Rate.
Recommended next step
Turn comparable sales into an offer range.
Offer price calculator →Apply it to a specific property: Comparable sales analysis.
Sources and review
- Why did I receive different valuations during the mortgage loan application process?, Consumer Financial Protection Bureau. Supports: Appraisal values are generally determined by adjusting between the home and comparable local sales.
Where this applies: United States. Industry practice rather than regulation; terms and costs vary by market and by company.
Last reviewed: · Updated:
Examples use illustrative figures; rules of thumb are labelled as such. Rates, limits and program rules change - confirm current figures with your lender or a qualified professional.
This definition is provided for general educational purposes and is not financial, legal, tax, or real estate advice. Verify important decisions with appropriately qualified professionals.
Continue Learning
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Use the free calculator for your own numbers, or analyze a specific home before you commit.
- Free calculatorOffer Price Calculator →Runs in your browser; nothing to sign up for.
- Paid reportComparable Sales Analysis →See what similar homes have actually sold for near your property. Price shown before checkout.
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