Short Answer
Comparable sales, or comps, are the primary method used to determine your home's value. Appraisers and real estate agents look at recently sold homes that are similar to yours in size, condition, location, and features. These sales establish what buyers are actually willing to pay in the current market. If similar homes have sold for $400,000, a buyer will not pay $450,000 for your home unless it offers something clearly superior.
Comparable sales are the foundation of real estate valuation because they reflect actual market transactions. An appraiser or agent will identify three to five recently sold homes that are as similar as possible to yours. They look for homes sold within the last three to six months, within a half-mile of your property, with similar square footage, bedroom and bathroom count, lot size, age, and condition. They also consider the sale terms. A cash sale at a lower price is different from a financed sale at a higher price with seller concessions. Adjustments are made for differences. If a comparable home has a finished basement and yours does not, the appraiser subtracts value. If your home has a newer roof than the comparable, value is added. The adjusted sale prices of the comps establish a value range for your home. Comps are not perfect. Every home is unique, and the market changes, but they are the most objective and defensible method for determining value. In fast-moving markets, recent sales are the most reliable. In slow markets, agents may need to look further back or expand the search area.
Bob's Advice
Redfin Senior Agent · AI Certified Agent
Comparable sales are the closest thing we have to a truth serum in real estate. I show my clients the actual sold data so they can see for themselves what the market is doing. It takes the emotion out of pricing. If you want to know what your home is worth, the answer is in the comps. Let me pull the recent sales in your neighborhood and show you exactly how the numbers add up. It is the most honest way to determine value.
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