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What Are Real Estate Comps and How To Find Them

TLDR

What You Need To Know

  • Real estate comparables (comps) are similar properties in an area used to estimate the value of another property in the area
  • You can find comps in your area by looking at recently sold homes on real estate websites, reviewing county records or asking your real estate agent
  • For Fannie Mae loans, appraisers must use at least three comparable sales to estimate a home’s market value(1)

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Whether you’re buying or selling a home, comparables (aka comps) are one of the most important pieces of information you can use to gauge the value of a property.

Before a house sells, you need to figure out how much it’s really worth. Comps help sellers set their asking price and help buyers determine how much they want to pay.

While comps are most commonly associated with buying and selling property, they are a valuable part of estimating property values during home appraisals, which lenders typically require to verify a home is worth the money they plan on lending you.

Real estate comps play a key role in real estate transactions. We’ll show you where to find them and offer tips on making sure the comparable properties you use are relevant and accurate.

Real Estate Comps, Defined

Real estate comparables (comps) are similar properties in an area used to estimate the value of another property in the area. Accurate comps will be located in the same area and share similar characteristics with the home.

Comps are your best option if you’re trying to figure out how much your house is worth without enlisting a professional appraiser.

Let’s say you own a home with 2,000 square feet of space, three bedrooms and two bathrooms, and it sits on a 10,000-square-foot lot. The ideal comp for your home would be your next-door neighbor’s home that was built around the same time as your house, shares similar characteristics and sold last week. 

Unfortunately, things don’t usually work out that perfectly. You’ll likely work with similar homes that recently sold or are listed for sale in your general area or zip code.

Real estate agents also use comps when they compile a comparative market analysis (CMA) to provide an in-depth analysis of a property’s value. They use this information to help establish the home’s listing price.

It’s typically easy to find comps. All you need is a computer and an internet connection.

Where and How To Find Comps

You can find comps in your area by looking at recently sold homes on real estate websites, reviewing county records or asking your real estate agent.

Let’s break down how to use each option to find homes comparable to yours.

Real estate websites 

To run comps on Zillow (or any other real estate website), you start by typing in your property’s address. Select “sold” to filter your search results, then sort them by the most recently sold homes. Focus on homes that sold in the last 6 – 12 months.

Next, weed out homes that aren’t similar to yours. For starters, make sure the potential comp has the same number of bedrooms and bathrooms. Then check that the living areas in the home are around the same size as yours.

Comparing a bungalow to a McMansion won’t help. If your home should be featured on “Million Dollar Listing Los Angeles,” don’t compare it to a fixer-upper on “Property Brothers” – they’re not the same thing.

County records

The county clerk or property appraiser’s office publishes publicly available data on home sales. In addition to the sale price and date of sale, county records can provide basic details, including when the home was built and the number of bedrooms and bathrooms.

You can access county property records online and in person. Just keep in mind that their records may take a few weeks to update after a sale. County records do come with some disadvantages. They are incomplete and won’t include certain types of information, such as seller concessions. And details on the property (such as square footage or the type of air conditioning) may not be accurate.

Your real estate agent and the multiple listing service (MLS)

Many real estate agents offer complimentary CMAs to their clients. Even agents who don’t offer free CMAs will likely be willing to share some comps for your review. There’s also a good chance your real estate agent can access the MLS and send you comps.

MLS comps have the most information on a house. They have the most recent photos of the property and additional details of the sale, like the type of financing the buyer used and seller concessions.

Tips on Looking for Real Estate Comps

When you’re reviewing potential comps, you should do more than glance at the home’s price tag and basic features. Carefully evaluate each property to determine whether it’s a relevant comp. 

  • You should examine online photos closely.
  • You should carefully review the home’s description. Don’t skip the details, including the area school district and the home’s utilities.
  • Appreciate that the listing may not give you all the information you need. A listing is only as good as the agent who writes it and probably won’t include details about the home’s defects or less appealing features.
  • If you can do it, see the house in person. Nothing beats a firsthand look at a property and its neighborhood.

How Real Estate Comparables Are Used and Calculated

Anyone can use real estate comps, though the most common users of comps are buyers, sellers, real estate agents and appraisers.

But how and why do each of these parties use comps?

  • Home sellers: Whether they’re listing their home for sale by owner (FSBO) or working with a real estate agent, sellers use comps to help them appropriately price their homes and often set their asking price based on the sales price of comparable homes.
  • Home buyers: Buyers use comps to help them make a competitive offer without overpaying. If a buyer wants to make an offer below asking, they’ll likely use comps to justify the lower purchase offer and make a strong case for why the seller should consider accepting it.
  • Real estate agents: Real estate agents representing both buyers use comps to help their clients come up with a competitive purchase offer. When agents represent sellers, they use comps to help their clients set their list price. Many real estate agents use a home’s price per square foot as comps to either make an offer or price the home. 

For example, if a 2,000-square-foot house just sold for $400,000 (that’s $200 per square foot). A real estate agent might use the $200 per square foot figure to list their client’s 2,100-square-foot home at $420,000.

  • Real estate appraisers: Real estate appraisers use comps to analyze a property’s value. Appraisers will collect comps and make relevant adjustments to arrive at an estimate. For Fannie Mae loans, appraisers must use at least three comparable sales to estimate a home’s market value.[1]
  • Homeowners: Homeowners can use comps to learn how much equity they have in their homes.

Things To Consider When Looking for Comps

Comps can be tricky. If you want your comps to be as accurate as possible, consider the following factors:

  • Where is it? Location is everything in real estate. Even if a home seems close, remember to account for changes in subdivisions, school districts or homes located on major roads or next to commercially-zoned properties.
  • What kind of home is it? Is it a townhouse or a ranch-style home? Style and function are important components when you’re calculating comps. Don’t discount the value of certain aesthetics and features.
  • Is the layout ideal? Two similarly sized homes may not be laid out the same way. Sometimes a home can have a poor layout and fewer useful square feet or spaces that aren’t functional. A bad layout can easily knock a few thousand dollars or more off a home’s price.
  • How big is it? Consider the size of the home. How many square feet of living area does it have? How many bedrooms and bathrooms? Are the rooms spacious or cramped?
  • What’s the price per square foot? Is the price per square foot in line with other recent sales in the area?
  • How big is the lot, and what is the yard like? A larger lot or well-manicured yard will typically increase a home’s value. Smaller lots or oddly-shaped yards may decrease curb appeal and functionality, resulting in a lower sale price.
  • When was it built? Newer construction homes are typically more desirable and command a higher price per square foot than older homes. When you’re comparing homes, make sure to check the year the property was built.
  • What condition is it in? A home’s condition can change its value by hundreds of thousands of dollars. What upgrades does the home have? How does the roof look? Are there new windows? When were the kitchen and bathrooms last renovated? Is there evidence of mold or other problems?
  • When did it sell? What time of year? The timing of the sale is important to consider when you’re looking at comparables. Did the home sell 3 weeks ago or last year? Have market conditions changed since then? The time of year can also contribute to price changes since homes tend to sell for more in the spring and summer. 
  • Does the home have any unique features? Homes with unique features, like a swimming pool, storage shed, garage or carport, may be worth more than similar properties without these features.
  • Is it a foreclosure or short sale? Foreclosures and short sales may not be the best properties to use for comps because they can be subject to liens or encumbrances that reduce the property’s value.

Use the Comps as Your Compass 

Comps are the single most useful tool at your disposal when you’re estimating how much a property is worth. You can find comps in several places: real estate websites, public records, your real estate agent and the MLS. 

Whether you’re looking to buy, sell or are curious about how much equity you have in your home, use comps as your compass.

  1. Fannie Mae. “Selling Guide.” Retrieved October 2022 from https://selling-guide.fanniemae.com/Selling-Guide/Origination-thru-Closing/Subpart-B4-Underwriting-Property/Chapter-B4-1-Appraisal-Requirements/Section-B4-1-3-Appraisal-Report-Assessment/1032992441/B4-1-3-08-Comparable-Sales-10-02-2018.htm#

ICYMI

In Case You Missed It

  1. Real estate comps can be used by buyers and sellers in negotiations, justifying an offer or an asking price

  2. The best comps are properties located in the same area as your property that are similar in size, age, condition, style and quality

  3. When you’re evaluating comps, make sure to account for details that can impact a property’s value, like the location, layout, lot size and overall condition

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