Comps (Comparable Sales)
Recent sales of similar nearby properties used to estimate a subject property's value. Comps are the foundation of as-is value, ARV, appraisals, and an investor's purchase decision.
Comps — short for comparable sales — are recent sales of similar properties in the same area, used to estimate what a subject property is worth. Comps are the backbone of nearly every real estate valuation: appraisals, BPOs, as-is value, and ARV all rest on them, and savvy investors run their own comps before making an offer.
What makes a good comp
The closer a comp matches the subject, the more reliable it is. Appraisers and investors look for similarity in:
- Location — same neighborhood, ideally within ~0.5–1 mile; same school zone and similar street appeal.
- Recency — sold recently, typically within the last 3–6 months, so the comp reflects the current market.
- Size & layout — similar square footage, bed/bath count, and lot size.
- Condition & age — comparable updates and year built (critical: match condition to the value you're estimating).
- Property type — single-family to single-family, not condo to house.
Adjustments
No two properties are identical, so comps are adjusted for differences. If a comp has an extra bathroom or a finished garage the subject lacks, its sale price is adjusted down to reflect the subject; if the subject is larger, the comp adjusts up. The adjusted comp prices then bracket the subject's value.
As-is comps vs. ARV comps
A crucial distinction for investors:
- For as-is value, pull comps in similar (unrenovated) condition — other distressed sales.
- For ARV, pull comps of fully-renovated homes — what the property will resemble after the rehab.
Using renovated comps to justify an as-is price (or vice versa) is a classic way investors misjudge a deal.
Where comps come from
The MLS is the gold standard (actual sold prices, full detail). Public records, county data, and investor tools also provide sales data. Note that in non-disclosure states (like Texas), public records may not show sale prices, so MLS access or an agent is essential for reliable comps.
Why comps decide deals
- They set your max offer. Combined with the 70% rule and your repair estimate, comps determine your MAO.
- They drive the appraisal. The lender's appraiser will pull comps; if yours were optimistic, the appraisal — and your loan — come in lower.
- Conservative comps protect you. Cherry-picking the highest sale inflates your ARV and your risk. Pull a balanced set, lean slightly conservative, and your numbers will hold up under the lender's scrutiny.
Good comping is the single most important valuation skill in investing — get the comps right and the rest of the analysis follows.
Frequently asked questions
What makes a good comparable sale?
Similarity to the subject: same neighborhood (ideally within about a mile), sold recently (usually within 3–6 months), similar square footage and bed/bath count, comparable condition and age, and the same property type. The closer the match, the more reliable the comp — and differences are adjusted for in price.
What's the difference between as-is comps and ARV comps?
As-is comps are recent sales of similar unrenovated or distressed properties, used to estimate current value. ARV comps are sales of fully renovated homes, used to estimate the after-repair value. Matching the comp's condition to the value you're estimating is essential — mixing them up distorts the deal.
Where do I get comps in a non-disclosure state like Texas?
From the MLS or a real estate agent. In non-disclosure states, public records often don't show actual sale prices, so county data is unreliable for comping. MLS access — directly or through an agent — gives you the real sold prices needed for accurate as-is and ARV estimates.