Real Estate Investing Glossary
Comps (Comparable Sales)
Last reviewed 2026-07-15
Comps are recently sold similar properties nearby, used to estimate a home’s market value by comparison and adjustment.
What are comps?
Comps, comparable sales, are the recently sold properties most similar to the one being valued, and comparing against them is how nearly all residential real estate gets priced. Agents build comparative market analyses from comps, appraisers anchor their reports on them, investors derive ARVs from them, and county assessors lean on them for tax values.
Good comps share five dimensions with the subject property: location (same neighborhood or school zone, ideally within half a mile), recency (sold within three to six months), size (within about 20% of square footage, same bed/bath range), age and style, and condition. Because no two homes match exactly, values are adjusted for differences, adding for the comp’s missing garage, subtracting for its extra bathroom, to translate each comp’s price into an implied value for the subject.
The craft is in selection and honesty. Cherry-picking the three highest sales produces a number that feels good and fails at appraisal; using active listings instead of closed sales measures asking prices, not market prices. Investors should pull comps themselves (public records, portal sold filters, or an agent’s MLS access), weight the most similar sales heaviest, and note market direction, in fast-moving markets, six-month-old comps need time adjustments.
Worked example
Valuing a 1,450 sq ft 3/2 ranch: comp A (1,500 sq ft, same street, sold 2 months ago, $242,000), comp B (1,400 sq ft, 0.3 miles, renovated kitchen, $249,000), comp C (1,480 sq ft, 0.4 miles, sold 5 months ago, $238,000). After adjusting B down $8,000 for its renovation and time-adjusting C up $3,000, the indicated value clusters around $240,000 to $243,000.
Frequently asked questions
- How many comps do I need to value a property?
- Three solid comps is the standard minimum, it is what appraisers must include, and five or six give a more reliable range. Quality beats quantity: two truly similar homes on the same street outweigh ten loose matches across town. When comps are scarce (rural areas, unusual properties), widen the radius and time window gradually and adjust more carefully, or the value estimate degrades fast.
- Can I use active listings as comps?
- Not as primary evidence, listings show what sellers hope for, and overpriced listings sit unsold precisely because the market rejected those prices. Closed sales are the record of what buyers actually paid. Active listings are still useful context: they reveal your future competition when selling and, if similar homes are listed below your comp-based estimate, that is a warning the market is softening.
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