Comps (Comparable Sales)

Comps (comparable sales) are recently sold properties similar in location, size, and condition to a subject property, used to estimate its market value.

Comps — comparable sales — are recently sold properties similar to the one you are evaluating, used to estimate what it is worth. Good comps match the subject on the things buyers actually pay for: location (same neighborhood, ideally within half a mile), size and layout (square footage, beds, baths), age and style, condition, and recency — sales inside the last three to six months carry the most weight in a moving market.

In practice, comping is an adjustment exercise. Say your subject is a 3-bed, 1-bath, 1,100-square-foot house you plan to value at full renovation. You find three renovated sales nearby: $170,000, $176,000, and $181,000, all similar size and sold within six months. That cluster supports an ARV around $175,000 — and if one of the three backs to a highway or has a second bathroom, you adjust for the difference rather than pretending it away. Sold prices are the evidence; active listings only tell you what a seller hopes.

What beginners get wrong: comping the house they wish they had. They stretch the radius to grab a high sale from a nicer neighborhood, cross school-district or highway boundaries the market treats as walls, use list prices instead of closed sales, or comp a gut-job against renovated homes without adjusting for condition. Every investor who looks at your deal will pull their own comps — if yours only survive on a cherry-picked outlier, the deal dies at underwriting instead of at the closing table.