What Are Real Estate Comps?

What are comps in real estate?

Comps (short for “comparables”) are recently sold homes that are similar to a home you’re considering buying or selling in the area. Comps are one of the most important tools for making informed real estate decisions. They’re used by buyers, sellers, real estate agents and appraisers to help assess the value of a particular home.

Real estate comps are useful to buyers, sellers, agents and appraisers.

One important distinction to make as you investigate comps is between value and price. Value is how much the home is worth to potential buyers in the current market; price is how much the home is actually listed for. The goal for a buyer is to find a home with a price that’s similar to its value, and reviewing comps can help.

How real estate comps work for buyers

Buyers can use comps to gain a better understanding of their local market as they start the homebuying process. One way to do this is to track the prices of homes that recently hit the market.

When you work with a real estate agent, you’ll have access to multiple listing services (MLS), which are helpful tools for observing local markets. An MLS is a database of all homes listed and sold in your area that includes details like the year the home was built and upgrades made by the seller. You can set up email alerts for homes similar to what you’re looking for, and the system will send you a daily or weekly digest of home sales in a particular area.

As you observe the market, take note of how quickly homes are marked as “pending” (or “sale pending”). This can indicate the kind of market (buyer’s or seller's) you’re in, which can impact real estate prices and availability. Once you’ve found the right home for you, you can use info from comps to make realistic offers that make sense in the current market.

» READ MORE: Homebuying checklist

How real estate comps work for sellers

Sellers can use comps to assess the housing market and choose fair listing prices for their properties. It can be difficult to estimate the value of a home you've lived in for years — in these cases, we often grow emotionally attached.

A seller’s agent can offer unbiased listing recommendations based on local comps. They can also offer expertise regarding negotiations. For example, your agent may recommend a starting price that’s a little higher than the comps to create some wiggle room in the negotiation process.

How real estate comps work for real estate agents

Real estate agents use comps to conduct a comparative market analysis (CMA). A CMA is an examination of recently sold local properties that are similar to a home you’re interested in buying or selling. This helps an agent determine the market value of your property.

Your real estate agent can pull comps and other relevant info from an MLS database.

Say you find a particular home you want to buy. Before you submit an offer to purchase, your real estate agent will review a list of recently sold properties (within the past three to six months) in that area.

These homes will also be similar in terms of square footage, number of bedrooms and other features. Your agent can then advise you on how much to offer based on the comps and general trends in the housing market.

For example, if the comps sold at $155 to $177 per square foot, your agent may recommend offering $165 per square foot. On a 2,000-square-foot home, that’s an offer price of $330,000.

Real estate agents will also use a CMA to help you price your home appropriately if you’re looking to sell. Too high a price for the market value of the home could keep potential buyers from viewing the property. Keep in mind that you might not be able to sell your home for what you bought it for, depending on the market.

» READ MORE: Homeownership costs

How real estate comps work for appraisers

The purpose of a home appraisal is to determine the estimated value of the property. Appraisers first examine the condition of the home, then they compare the property with similar homes in the area. These comps influence the final appraised value.

Since market conditions are ever-changing, it’s important to note that the appraisal report only shows the value of the home at a single point in time.

Criteria for selecting and using real estate comps

Properly chosen comparables provide confidence in your pricing strategy, help you make competitive offers, and minimize the risk of paying too much or underselling your property. By applying the following criteria consistently, you can select comps that accurately reflect market value.

How to find real estate comps

Finding accurate real estate comps is essential for understanding a property’s market value. Start by looking at recently sold homes in the same neighborhood with similar size, condition and features. By combining the following tools, buyers and sellers can identify relevant comps and gauge realistic pricing.

• Multiple listing service (MLS): The MLS is a database of current and past listings accessible through real estate agents. It provides detailed property information, including sale prices and features.
• Online platforms: Websites like Zillow, Redfin and Realtor.com allow you to search for recent sales and filter by size, location and amenities.
• County assessor & public records: These sources provide official property records, ownership history and tax assessments. They’re useful for verifying sale prices and property details.
• Automated valuation models (AVMs): Tools like Zillow’s Zestimate use algorithms to estimate home values based on comps, market trends and public records. While convenient, AVMs should be used alongside verified data.

Real estate comp examples

By comparing the subject property with these comps, you can see how size, features and sale prices align. This helps determine whether the asking price is fair, too high, or below market value.