What Is Comparable Sales (Comps)?
Also known as: Comps, Comparables
Comparable sales, or comps, are recently sold properties similar to the subject property in location, size, age, and condition. Wholesalers use comps to establish a defensible ARV.
Comparable sales, or comps, are recently sold properties similar to the subject property in location, size, age, and condition. Wholesalers use comps to establish a defensible ARV.
Comparable Sales (Comps) explained
Comps turn valuation from a guess into evidence. To estimate what a renovated property will sell for, you find homes that already sold nearby and were genuinely comparable, then use their sale prices to project the subject's value.
Good comps share the subject's neighborhood, are within roughly 20% of its square footage, match bed and bath count where possible, and sold recently, usually within the last 90 to 180 days. You generally lean on sold prices rather than active listings, because a listing only shows what a seller hopes to get, not what a buyer actually paid.
Example
To value a 3-bed, 2-bath, 1,500 sq ft home, you pull three renovated 3/2 homes within a half mile that sold in the last four months for $285,000, $292,000, and $279,000. Their average supports an ARV near $285,000.
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