Real estate comps: Understanding the value of your home

Key takeaways

• Real estate comps are recently sold homes with similar characteristics — such as age, size, condition, location and sale date — that help determine a property’s value when buying, selling or evaluating equity.
• Buyers and sellers can find comps through tools like a Home Valuation Report, multiple listing service data from a real estate agent and firsthand research at open houses, while avoiding outdated or mismatched sales that can skew pricing.
• A professional appraisal may be necessary when the market is shifting or a property is unique, ensuring an accurate valuation when comparable sales are limited or hard to match.

Comparable sales, often called “comps,” are one of the most common ways to estimate what a home is worth. By looking at recently sold properties with similar features, buyers and sellers can get a sense of how a home might be priced in the current market.

But comps aren’t exact. No two properties are identical, and even small differences — such as renovations, location or timing — can affect value. That means comps provide a starting point, not a precise number.

You might use comps when selling, buying or estimating how much equity you’ve built. Access to comparable sales can come from a real estate agent, online valuation tools or public records.

To understand how comps work, it helps to start with what they are and what makes a strong comparison.

Real estate comparables, or comps, are recently sold properties similar to the one being evaluated.

An ideal comp might be a condo in the same building with the same floor plan, or a nearby property similar in size, age and condition. Because comps reflect actual sale prices, they offer a snapshot of what buyers have recently been willing to pay in a given market.

No two properties are identical, so comps work best when they closely align across several key factors:

• 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. 

A Home Valuation Report is a free and effective way to find nearby comps and determine your home’s value. The report will include detailed information on comparable properties and pricing insights that will help you 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. 

One of the most common mistakes is relying on outdated or mismatched comps. Focus on properties that have sold recently and closely resemble the one being evaluated.

It’s also important to account for differences. A home with upgraded features, a larger lot or a unique amenity such as an accessory dwelling unit will typically sell for more than a similar property without those features.

Avoid relying too heavily on price per square foot alone, which can vary depending on layout, condition and other factors.

In some cases, comps alone aren’t enough to determine a value.

A professional appraisal may be helpful if:

• The market is changing quickly
• Few comparable sales are available
• The property has unique features

Lenders typically require a home appraisal before approving a mortgage, and sellers may use one to support a listing price in uncertain conditions.

This story was updated on May 7.