comparable sales
Recently sold properties similar in size, location, and condition used to estimate the market value of a subject property. Also called 'comps'.
Example
“The appraiser used three comparable sales from the same neighborhood to support the $425,000 valuation.”
Memory Tip
COMPARABLE sales = COMPS. What did similar homes sell for? That tells you what yours is worth.
Why It Matters
Understanding comparable sales helps you determine if you are paying a fair price when buying a home or if you are pricing your property correctly when selling. This knowledge protects you from overpaying or underpricing one of the largest financial decisions you will make.
Common Misconception
Many people believe that any recently sold home in the same town can be used as a comp, but properties must be genuinely similar in size, condition, and location to provide accurate value estimates. A newly renovated home in a desirable neighborhood is not a valid comp for a fixer-upper across town.
In Practice
If you are buying a three-bedroom home in a suburban area, your real estate agent might identify three comparable homes that sold in the past three months for 450,000 dollars, 455,000 dollars, and 448,000 dollars. If the home you are interested in is listed at 520,000 dollars, the comps suggest you may be significantly overpaying.
Etymology
COMPARABLE (similar enough to compare) SALES. Properties you can COMPARE to determine value.
Common Misspellings
Compare today's mortgage rates
Related Terms
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Other real estate terms you should know
See Also
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