A comp (comparable sale) is a recent sale of a property similar to yours in location, size, beds/baths, and condition, used as evidence of market value. Comps are how ARV is established, how appraisals are built, and how buyers, sellers, and lenders argue about price with facts instead of opinions. A good comp set is close, recent, and similar; each difference between a comp and your property calls for an adjustment, and too many adjustments means the comp doesn't belong in the set.
The formula / structureNo formula — value comes from a set of adjusted comparable sales, weighted toward the most similar and most recent.
Comp: a worked example
Worked example. Subject: 3-bed, 2-bath, 1,400 sq ft. Comps sold within a mile in 6 months: a near-twin at $208,000; a 1,550 sq ft home at $221,000 (adjusted down for size); a 3-bed, 1-bath at $192,000 (adjusted up for the missing bath). The set supports an ARV near $210,000 — not the $235,000 the seller hoped for, and not any single comp's raw price.
What affects Comp
- Distance — same neighborhood beats same zip code
- Recency — markets move; older sales get discounted or excluded
- Condition — a renovated comp prices a renovated subject
- Adjustments for size, beds/baths, garage, lot, and amenities
Get the Comping Checklist — free.
The 14-point checklist we run on every property before a number leaves our mouths.