Learn how comparables determine property values, their role in real estate appraisal, listing prices, and key criteria for selecting comps.
"Comparables," often referred to as "comps" in real estate, are properties that are similar to a specific property in question (the subject property) in terms of location, size, condition, and features. These recently sold properties are used as a benchmark to determine the subject property's fair market value. Comparables are a fundamental tool in real estate appraisal, real estate listing, and property tax assessments.
Finding perfect comps can be challenging, especially in areas with unique properties or limited recent sales data. Adjustments may be necessary to account for differences between the subject property and the comps, such as location desirability, physical condition, or special features like swimming pools or solar panels.
Comparables are a crucial element in the real estate industry, helping to ensure transparency and fairness in property valuations, sales, and tax assessments
You can find comparables by researching recent sales of similar properties in your area, using online real estate databases, consulting with a real estate agent, or hiring a professional appraiser. These sources can provide detailed information on sales prices, property features, and market trends relevant to your property.
If no exact matches are available, look for properties that are as similar as possible and make adjustments for differences. Consider factors such as square footage, number of bedrooms and bathrooms, property condition, and unique features. Real estate professionals can help make these adjustments to estimate a fair market value.
The frequency of checking comparables can depend on your objectives. If you're considering selling or refinancing, checking comps before deciding is advisable to get the most current market data. For ongoing awareness of your property's value, checking annually or bi-annually can provide insights into market trends and potential equity changes.
Subscribe to our monthly newsletter for up-to-date real estate industry trends, news, and insights.