What we'll cover
Why home comps are important
Online tools to get comp information
How to make comps work for you
As a homebuyer, you may have heard a real estate agent refer to "comps" when you started looking for a home or read the word on a real estate website. Let's take a look at real estate comps, what they are and how to scout them out on your own.
What are comps in real estate?
Real estate comparable sales, or comps for short, determine a home's fair market value using recently sold homes in the area that are similar to the property you plan to buy or sell. Comps will show you the recent sale prices or rental rates of homes that have similar location, size, condition and property to the home you're buying, selling or renting.
Who uses real estate comps?
Many parties use real estate comps. Buyers can use them to determine how much to offer for a home and as a negotiating tactic to achieve a lower price or seller concessions. For sellers, comps can help determine a listing price if they don't want to hire an agent to help them sell their homes. Appraisersuse comps to determine how much area homes have recently sold for — their method to assess the fair market value of a home. Finally, comps help real estate agents run a comparative market analysis (CMA), a report that compares the home to recently sold properties.
Read more: Considering a home? Find out what kind of mortgage is right for you.
The components of real estate comps
Real estate comps look at the following characteristics of a home:
Square footage
Number of bedrooms and bathrooms
Amenities like big backyards or garages
Neighborhood features
Final sale price and time on market
Other value-influencing factors can also come into play, including market conditions, location differences and other information surrounding the sale.
Beyond down payment and neighborhood conditions, real estate comps remain one of the most important considerations when it comes to buying or selling real estate.
How to find real estate comps for your house
Once you're ready to start searching for comps on a property you're interested in, there are resources available that can help you get started.
The Multiple Listing Service
While it may sound like one definitive resource, the Multiple Listing Service (MLS) is really a collection of local databases that holds information about properties on the real estate market. Local real estate professionals agree to share information on their local MLS, making it easier to connect home buyers and sellers. You need to have a real estate license to access the MLS, so you'll have to work with a real estate agent or broker to access the listings on your local MLS database.
Online real estate platforms
If you're interested in finding comps based on different criteria, you can start exploring with ComeHome, an online home search tool. ComeHome allows you to search by location and filter by details such as the number of bedrooms, amenities, square footage and more to find relevant comparisons. You can also search for other community traits that matter to you, like local libraries or coffee shops. When searching you can:
Filter homes by neighborhood, price, school ratings and more
Track and review the homes you love in one centralized place
Receive more home matches based on your search criteria as they become available on the market
And while you can get started searching on your own, it's often a good idea to consult with a real estate agent who can help you navigate the market and see the big picture.
How to use real estate comps
Once you start researching, you'll probably have a few similar homes to consider. Choose three comps that are the most similar to your property.
If you're able, visit them in person to confirm their similarities. Take a look at the yard, exterior, neighborhood and surrounding area. If in-person isn't an option, do as much research as you can online. Really dive into the details to confirm what you can.
If everything checks out, you can use these comps as a reasonable benchmark of the fair market value of the home you're considering.
The bottom line on real estate comps
Beyond down payment and neighborhood conditions, real estate comps remain one of the most important considerations when it comes to buying or selling real estate. An accurate, well-researched comp can help homebuyers and sellers make informed decisions for their financial future.
