Comps, short for comparable properties, are recently sold homes near the one you're looking at that are as close to it as you can find. They're how agents, appraisers and lenders decide what a property is worth, and they're how you avoid overpaying, set a realistic after-repair value (ARV) on a flip or BRRRR, and check an asking price before you offer.
This guide walks through running comps step by step. Use the Comparable Properties Spreadsheet to line up each comp next to your subject property as you go.
1. What comps tell you
A property is worth what a buyer recently paid for something like it, nearby. Comps turn that into a number you can defend:
- Market value: what the property should sell for as it stands today.
- After-repair value (ARV): what it should sell for once your rehab is done, using comps that are already in that finished condition.
- Rent: rent comps, nearby rentals of similar size, tell you what the property can rent for. They're run the same way, with leased rentals in place of sales.
Asking prices aren't comps. A listing tells you what a seller hopes to get; a closed sale tells you what a buyer actually paid.
2. Set your comp criteria
Start tight and widen only when you can't find enough sales. Good comps match the subject property on:
- Location: the same neighborhood or subdivision, ideally within half a mile. In rural areas you may need to go a few miles. Don't cross a highway, school district line or other boundary buyers care about.
- Sale date: sold in the last three to six months. In a fast-moving market, the most recent sales count most.
- Property type: single-family with single-family, duplex with duplex, condo with condo.
- Size: living area within about 20% of the subject's square footage.
- Beds and baths: the same count, or within one.
- Age and style: built around the same time, in a similar style.
- Condition: the condition the property is in now for market value, or the condition it will be in after your rehab for ARV.
Aim for at least three good sold comps. Five or six give you more confidence.
3. Find recent sales
The most accurate sales data is in the MLS, so the fastest way to get comps is to ask an investor-friendly agent to pull them. Agents can see sale details, days on market and concessions that public sites don't show.
Without an agent, you can find sold properties on public listing sites by filtering to recently sold homes, and confirm sale prices and dates in the county's property records. Note any sale that wasn't at arm's length, such as a foreclosure, a sale between relatives or a heavily distressed property, and leave it out unless your subject is the same kind of sale.
4. Adjust for the differences
No comp is identical to your property, so adjust each comp's sale price to account for what's different. Always adjust the comp toward the subject, never the other way:
- If a comp has something your property doesn't, like an extra bathroom or a garage, subtract its value from the comp's price.
- If your property has something the comp doesn't, add its value to the comp's price.
The common adjustments are square footage, bedrooms and bathrooms, garage and parking, lot size, condition and updates, and features like a finished basement or pool. Local agents and appraisers can tell you what each one is worth in your market; the values differ a lot from place to place.
Price per square foot is a useful check: divide each comp's sale price by its living area and compare. If one comp sits far outside the others, look for the reason before you rely on it.
5. Settle on a value
Once each comp is adjusted, you'll have a range of values. Don't just average them. Give the most weight to the comps that needed the fewest and smallest adjustments, sold most recently and sit closest to the subject. The value those comps point to is your estimate.
Then use it: compare it to the asking price before you offer, plug it into your deal analysis, or use it as the ARV for a flip or BRRRR. If the numbers only work at the top of your range, the deal is probably too thin.
Before you trust your comps
Run through these for every property you comp.
Take this checklist with you
The PDF has a notes column for every item. Print it for your walk-through.
Run the numbers next
With a value in hand, run the deal through the rental property calculator, the fix and flip calculator or the BRRRR calculator to see whether it works at the price you'd pay.
Frequently asked questions
How many comps do I need?
At least three sold comps. Appraisers usually work from three to six, and more gives you a better sense of the range.
How far back should comps go?
Three to six months is the usual window. In a slow or rural market you may need to go back a year, but give older sales less weight and account for how prices have moved since.
What's the difference between comps and a CMA?
A comparative market analysis (CMA) is a report an agent prepares from comps. Running comps is the work behind it, and you can do it yourself to check an agent's or seller's number.
What if there aren't enough comps?
Widen one criterion at a time: first the date range, then the distance, then the size range. Note each time you widen, and lean more heavily on the comps that still match closely.
Are comps the same as an appraisal?
No. An appraisal is a licensed appraiser's opinion of value, usually ordered by a lender. It's built from comps, so running your own lets you see a low appraisal coming before it surprises you.
Get comps from an investor-friendly agent
An agent who works with investors can pull sold comps from the MLS and tell you what each difference is worth in your market.