Comparable Sales (Comps)
Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Full Definition
Comparable sales ('comps') are recently sold properties that are similar to the subject property in key characteristics — including location, size (square footage), age, condition, bedroom/bathroom count, and amenities. Appraisers use comps in the Sales Comparison Approach to estimate value, adjusting the sale prices of each comparable up or down to account for differences from the subject property. Real estate agents use comps to prepare a Comparative Market Analysis (CMA) to recommend listing prices or advise buyers on offer prices. The best comps are recent (within 3-6 months), nearby (same neighborhood or comparable area), and similar in size and features.
Real-World Example
To appraise a 3BR/2BA, 1,800 sq ft ranch home in a neighborhood, an appraiser finds three similar homes that sold in the past 4 months for $320,000, $335,000, and $328,000, then adjusts for differences to arrive at a value estimate.
How Comparable Sales (Comps) Appears on the Real Estate Exam
Common question types, tested concepts, and what to watch out for
Comps are used in the Sales Comparison Approach (also called the Market Data Approach). An appraiser makes adjustments: if a comp has a feature the subject lacks, the comp's value is adjusted DOWN; if the subject has a feature the comp lacks, the comp is adjusted UP.
Related Terms
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