Comparable sales — universally known as "comps" — are recently sold properties that are similar to the subject property in terms of location, size, condition, features, and age. Comps are the foundation of property valuation in real estate, used by appraisers, real estate agents, buyers, sellers, and lenders to estimate fair market value. The principle is straightforward: a property is worth approximately what similar properties in the area have recently sold for, with adjustments for differences.
For a formal appraisal, the appraiser typically selects 3 to 6 comparable properties that meet specific criteria: they should have sold within the past 6 months (12 months in slow markets), be located within a reasonable distance of the subject property (typically within 1 mile in urban areas, further in rural areas), be of similar size (square footage within 10-20%), have a similar number of bedrooms and bathrooms, be of similar age and construction type, and have sold under normal market conditions (not foreclosures, short sales, or family transfers unless those are the norm in the area).
Once comps are selected, the appraiser makes dollar adjustments for differences between each comp and the subject property. If a comp has one more bedroom than the subject, the appraiser subtracts the estimated value of that bedroom from the comp's sale price. If the subject has a renovated kitchen that the comp lacks, value is added. If the comp has a pool and the subject does not, value is subtracted. These adjustments bring each comp's price in line with what it would have sold for if it were identical to the subject property. The adjusted prices are then reconciled into a final value opinion.
For buyers, understanding comps helps you make an informed offer rather than relying on emotion or the seller's asking price. For sellers, comps determine the right listing price — too high and the home sits on the market; too low and you leave money on the table. Real estate agents prepare comparative market analyses (CMAs) using the same comp methodology as appraisers, though CMAs are less formal and are used for pricing guidance rather than lending decisions.
Beycome offers a free property price estimator that analyzes comparable sales in your area to give you a data-driven value estimate. For sellers, understanding your home's value helps you set the right price when listing through Beycome's flat-fee MLS service. At closing, the appraised value (based on comps) is documented on your closing disclosure. Get your free closing quote.