Real Estate Comps: The Complete Guide

In real estate, there is no "blue book" that tells you what a home is worth. Unlike cars with their Kelley Blue Book values, every property is unique—different lot, different condition, different view. So how do we determine value? Through comparable sales.

Comps (short for "comparable sales" or "comparables") are recently sold properties that are similar to a subject property in location, size, features, and condition. They represent the most objective measure of market value because they show what buyers have actually paid for similar homes—not what sellers hope for, not what algorithms guess, but actual transaction data.

This guide will teach you how to find the right comps, analyze them effectively, make appropriate adjustments, and avoid the common mistakes that lead to mispricing.

What Are Real Estate Comps?

Real estate comps are recently sold properties that are similar to the property you're trying to value. They form the backbone of every Comparative Market Analysis (CMA) and formal appraisal. Without good comps, any pricing estimate is essentially a guess.

The principle behind using comps is called substitution: a rational buyer will not pay more for a property than they would for an equivalent alternative. If similar homes in the neighborhood are selling for $400,000, a buyer won't pay $500,000 for yours unless it offers something significantly better.

Comps are distinct from active listings (homes currently for sale) and pending sales (homes under contract). While these provide useful context about market direction and competition, they don't tell us what buyers are actually paying. Only closed sales—comps—provide that data.

The Five Factors of a Good Comp

Not all recent sales make good comps. The best comparables share five key characteristics with the subject property. Think of these as a checklist—the more boxes a potential comp checks, the more reliable it is.

1. Location

Location is the most important factor. The ideal comp is on the same street or in the same subdivision. Why? Because location captures dozens of variables at once: school district, crime rates, walkability, noise levels, views, and neighborhood prestige.

As a general rule, prioritize comps in this order:

• Same street or immediate block (ideal)
• Same subdivision or neighborhood (very good)
• Within 0.5 miles (good)
• Within 1 mile (acceptable)
• Beyond 1 mile (use only when necessary)

2. Recency

Real estate markets move quickly. A comp from 12 months ago reflects a market that may no longer exist. Interest rates might have changed by 2 points. Inventory might have doubled or halved. Buyer sentiment might have shifted dramatically.

The recency hierarchy:

• 0-3 months: Excellent—reflects current market conditions
• 3-6 months: Good—still relevant with minor market adjustment
• 6-12 months: Use with caution—may need significant adjustment
• 12+ months: Only if nothing else is available

3. Size

Square footage matters, but it's not just about the number. The layout, functionality, and proportion of living space affect value. A 2,000 sqft home with a great open floor plan may be more valuable than a 2,200 sqft home with chopped-up rooms.

Generally, stay within 20% of the subject property's square footage. A 2,000 sqft home should be compared to homes between 1,600 and 2,400 sqft. Larger differences require significant adjustments that reduce reliability.

4. Property Type

Compare apples to apples. Single-family homes should be compared to single-family homes. Condos to condos. Townhouses to townhouses. Different property types have different buyer pools and pricing dynamics.

Beyond the basic type, consider architectural style. A mid-century modern ranch appeals to a different buyer than a traditional colonial, even if they're the same square footage. When possible, match style—but don't sacrifice location or recency for it.

5. Bed/Bath Count

Bedroom and bathroom counts affect which buyers will consider a property. A 4-bedroom home attracts families. A 2-bedroom home attracts couples or investors. Even if square footage is identical, these homes serve different markets.

Try to match bedroom count exactly, and bathroom count within one. If you must use comps with different counts, be prepared to make adjustments.

Where to Find Comps

There are several sources for comparable sales data, each with different levels of access, accuracy, and detail.

MLS (Multiple Listing Service)

The MLS is the gold standard for comp data. It contains the most complete and accurate information: actual sold prices, days on market, price changes, concessions, property details, and photos. Real estate agents have direct MLS access, which is one reason working with a professional matters.

MLS data includes crucial details that public records often miss: whether the seller paid closing costs, if the property sold as-is, how many times the price was reduced, and private remarks that explain unusual circumstances.

Public Records

County assessor websites and property records show recorded sale prices. This data is free and available to anyone, but it has limitations: data is typically delayed 30-90 days, details about property condition and features may be incomplete or outdated, and it doesn't show properties that failed to sell.

Public records work best for confirming data or researching areas where you don't have MLS access.

Real Estate Websites

Zillow, Redfin, Realtor.com, and similar sites show recent sales to the public. The data comes from MLS feeds and public records, but may lag behind by days or weeks. It's a good starting point for homeowners doing preliminary research.

Be cautious: these sites sometimes mix sold prices with estimates, and may not clearly distinguish between sale price and list price.

Professional CMA Tools

Modern CMA tools like CMAGPT combine multiple data sources, automatically filter for relevant comps, and help you analyze and adjust them. They're designed for real estate professionals who need accuracy and efficiency.

How to Select the Best Comps

Finding potential comps is easy. Selecting the best comps requires judgment and experience. Here's a systematic approach.

Step 1: Cast a Wide Net

Start by pulling all sales in the area that roughly match your subject property. Set broad filters: property type, a generous size range, and a reasonable geographic boundary. You might get 20-30 potential comps.

Step 2: Apply the Five Factors

Now narrow the list by applying the five factors: location, recency, size, property type, and bed/bath count. Eliminate comps that fail multiple criteria. You should be down to 8-10 candidates.

Step 3: Evaluate Condition and Features

Look at photos and descriptions. Is the comp renovated while your subject is dated? Does it have a pool that your subject lacks? Is it on a busy street while your subject is on a cul-de-sac? These differences matter and will require adjustments.

Step 4: Check for Arm's Length Transactions

Not all sales reflect true market value. Watch out for:

• Family sales: Sales between relatives often involve below-market prices
• Foreclosures: Distressed sales typically sell below market
• Short sales: Bank-approved sales to avoid foreclosure
• Estate sales: May be sold as-is below market
• Investor flips: May have artificially inflated prices

Unless your subject property is also in one of these categories, exclude these from your comps.

Step 5: Select Your Final Comps

Choose 3-6 comps that best represent the market for your subject property. Aim for a mix: some that bracket the subject on the high end, some on the low end. This gives you a range rather than a single point estimate.

Making Adjustments for Differences

Since no two properties are identical, you'll need to make adjustments to account for differences between your comps and the subject property. This is where science meets art.

The key principle: always adjust the comp toward the subject. If a comp has something the subject lacks (like a pool), subtract that value from the comp's price. If the subject has something the comp lacks (like an extra bedroom), add that value to the comp's price.

Common Adjustment Values

These are typical adjustment ranges—actual values vary by market, price range, and specific circumstances:

An Adjustment Example

Let's say a comp sold for $400,000. It has 3 bedrooms, 2 bathrooms, no pool, and a 2-car garage. Your subject property has 4 bedrooms, 2 bathrooms, a pool, and a 2-car garage.

• Subject has 1 extra bedroom: +$10,000
• Subject has a pool that comp lacks: +$20,000
• Total adjustments: +$30,000
• Adjusted comp value: $430,000

This suggests your subject property is worth approximately $430,000 based on this comp.

How Many Comps Do You Need?

The number of comps you need depends on market activity and how consistent the data is.

The Minimum: 3 Comps

You need at least three comps for any credible analysis. With only one or two, an outlier can skew your entire analysis. Three gives you the ability to identify if one sale was unusual.

The Sweet Spot: 4-5 Comps

Four to five comps provides enough data points to identify trends while keeping the analysis manageable. This is what most professional CMAs and appraisals use.

The Maximum: 6 Comps

More than six comps starts to become overwhelming and counterproductive. If you need to include that many, it often means you're struggling to find truly comparable properties. In that case, it's better to explain why comps are limited than to dilute the analysis with marginal matches.

Quality over quantity. Three excellent comps are worth more than six mediocre ones. A comp from the same subdivision that sold last month is far more valuable than a comp from a different neighborhood that sold eight months ago.

Common Mistakes to Avoid

Even experienced agents make mistakes with comps. Here are the most common errors and how to avoid them.

Cherry-Picking High Comps

Sellers often want to use only the highest-priced comps to justify an inflated asking price. This backfires: buyers and their agents will see the broader market data. Overpricing based on cherry-picked comps leads to extended days on market and eventual price reductions.

A credible CMA includes a balanced range of comps representing the true market.

Using Active Listings as Primary Comps

Active listings show what sellers are asking, not what buyers will pay. They're useful for understanding competition and market direction, but they shouldn't be your primary comps. Focus on closed sales.

Ignoring Condition Differences

Two homes can be identical on paper—same square footage, same beds/baths, same location—but if one is fully renovated and the other needs $50,000 in work, they're not comparable. Always account for condition in your adjustments.

Over-Adjusting

If you find yourself making dozens of adjustments to a single comp, it's not a good comp. The more you adjust, the less reliable your final number. Find better matches instead of trying to adjust a poor comp into relevance.

Ignoring Market Conditions

A comp from six months ago sold in a different market. Interest rates were different. Inventory was different. Buyer sentiment was different. Always consider whether market conditions have changed since your comps sold, and adjust accordingly.

Ignoring Days on Market

A home that sold in 3 days at list price was likely underpriced. A home that sat for 120 days before selling was probably overpriced initially. Days on market tells you something about whether a comp represents market value or an anomaly.

Frequently Asked Questions

Can I find comps without a real estate agent?

Yes, but with limitations. Public records and sites like Zillow show sold prices, but lack the detail of MLS data: days on market, expired listings, complete feature lists, and agent remarks. For a preliminary estimate, public sources work. For an accurate valuation, work with a professional who has MLS access.

What if there are no recent comps in my area?

In slow markets or unique properties, you may need to expand your search. Go back further in time (up to 12 months), increase your geographic radius (up to 2-3 miles), or consider properties that differ slightly in size or style. Document these limitations in your analysis and explain why adjustments were made.

Should I use pending sales as comps?

Pending sales can indicate market direction—if similar homes are going under contract quickly at asking price, the market is strong. But the final sale price isn't known yet. Use pending sales as supporting information, not primary comps.

How do foreclosures and short sales affect comps?

Distressed sales often sell below market value because the seller is motivated to sell quickly regardless of price. Unless your subject is also a distressed sale, exclude foreclosures and short sales from your comps—or note them separately with an explanation.

How often should comps be updated?

In active markets, refresh your comps every 2-4 weeks if a property hasn't sold. New sales provide more current data, and market conditions can shift quickly. If your home has been listed for 30 days without offers, pull fresh comps before considering a price reduction.

What's the difference between comps and appraisal comps?

Both use similar methodology, but appraisers must follow specific guidelines (like USPAP standards) and often use more conservative adjustments. Appraisals are official valuations for lenders. CMAs are market analyses used for pricing strategy. A well-done CMA should predict the appraisal value, but they're prepared differently.

Ready to Find Comps Faster?

Finding and analyzing comps manually takes hours. CMAGPT automates the process—searching for relevant comparable sales, suggesting adjustments, and generating professional CMA reports in minutes. Get the data you need to price properties accurately without the tedious research.