Real Estate Comps: Understanding the Value of Your Home

As you navigate a real estate transaction, comparables - or comps - are one of the most important tools at your disposal to help determine a home’s value. When you review comps, you’re analyzing recently sold homes that are similar in terms of condition, location and features. Comps provide essential data to price a home competitively and attract buyers, which ensures a smooth transaction.  

You may want comps because you’re selling your home, purchasing a new one, or determining the amount of equity that you’ve built in your property. In the past, getting the details to estimate your home’s value required a real estate professional or an appraiser, but finding comparable sales is significantly easier today.  

We’ll explain how to find comps in your area, and provide best practices around evaluating recent sales, to find the most accurate matches for your home.  

Real estate comparables (comps) are similar, recently sold properties that can be used to determine a home's value when buying or selling. An effective comp will closely mirror the features of the home it’s compared with. 

An ideal match could include a condo unit in your building with the same floor plan or a home in your neighborhood that’s similar in age, condition and size.  

As you review comps, consider how your home aligns with recently sold properties in terms of these criteria: 

• Age and condition: Comps should be similar in age and condition, with an equivalent amount of updates or renovations. 
• Bedrooms and bathrooms: The homes that are compared should have the same number of bedrooms and bathrooms.  
• Location: Your comps should be as close to the property that’s being evaluated as possible. They should offer similar accessibility to parks, shopping, walkability and public transportation.  
• Price per square foot: Your real estate agent may analyze the price per square foot of other recently sold homes in the area to help establish a value.   
• Sale date: The homes have ideally sold within the last three to six months. Recent sales data is essential, as market conditions can change.  
• Schools: Access to great schools can impact home values, so the accurate comps should feed into the same elementary, middle and high schools. 
• Size: The recently sold homes that you analyze should offer a similar amount of living space; a good comp will also have a similar lot size. 
• Type: The comps that you choose should be the same type of home. For example, if you’re selling a colonial, a home with a different architectural style (such as a Cape Cod or a Craftsman) is less likely to be the best match. 

If you’ve just begun preparing your home for sale, a Home Valuation Report is a free and effective way to find nearby comps and determine your home’s value. Your report will include detailed information on comparable properties and pricing insights that will help you better understand the market conditions in your local area. 

The market expertise of a real estate agent is essential to determine the best list price for your home. Your agent can review recent sales from the multiple listing service (MLS) and perform a comparative market analysis (CMA) to pinpoint the best list price for your home.  

Ask your agent how your home compares to the properties identified as comps. As they help you determine a sales price, there should be value adjustments – expressed as either a percentage or a dollar amount – for key differences between your home and the properties that it’s evaluated with. 

Another way to understand the value of your home is to conduct your own market research. If an open house is scheduled for a similar home, your first-hand observations about the home’s condition, location and curb appeal can help you decide the best way to price and market your property.  

If you have a Homes.com account, consider adding the property to your favorites so that you can track:  

• The number of days that it spends on the market. 
• When the home goes under contract. 
• Adjustments to the list price. 
• The sale price after the home is sold. 

Using outdated or irrelevant comps can be a significant mistake when setting a price for your home. Ensure that only recently sold homes (ideally within the last three to six months) are used to help you determine a list price. 

It’s also essential to adjust values for unique property features. For example, a home with a scenic view or a unique addition, such as an accessory dwelling unit, will command a higher sales price than a similar property that lacks those amenities.   

• Understand your local real estate market. Use the most recent sales data and listings available to find the closest value. If you’re listing your home at a time of year when sales typically slow down, ask your real estate agent if seasonality could impact your sales price.  
• Use multiple valuation tools, including a Home Valuation Report and a CMA from your real estate agent. 
• Weigh the differences between properties, such as the value added by a renovation or unique features. 

In some situations, you will need more than comparable properties to establish a value for your home. From a buyer’s perspective, it’s common for a lender to require a home appraisal to confirm a property’s value before underwriting a new loan. As a seller, securing a prelisting appraisal may make sense under the following conditions.  

A professional appraisal may be necessary if your local real estate market has undergone recent and significant changes. An appraiser may analyze additional criteria to establish a value. This could include the inventory of available homes, new trends in listing prices and the number of pending sales in the area. They may also review the number of similar available properties and market changes like the current timelines for contract and closing dates. 

Finding comps for a unique property may be difficult. Maybe your home is larger than most in the area, or you’re selling in a rural location with few sales. A home’s value might also be more difficult to determine if it sits on a particularly large lot of land.  

Ordering a prelisting appraisal in these scenarios can help you establish a value. It should also provide peace of mind that the deal will go through since lenders will order an appraisal after the home goes under contract.    

Finding the right comps is an important component of any real estate transaction. Buyers use comps to better understand the local housing market before submitting an offer. As a home seller, accurate real estate comps are essential to help you set a competitive list price.  

Online tools, such as a Home Valuation Report, can provide you with a strong estimate of what your home is worth. As you prepare your home for sale, the expertise of a local real estate agent will further set you up for success as you help you price and sell your home.