Why It Matters
You can't know what a property is worth by looking at its listing price. Listing prices are opinions. Comps are evidence. When you pull comps, you're looking at what buyers actually paid for similar properties in the same area within the last three to six months — and adjusting for differences.
Whether you're writing an offer on a duplex, estimating the ARV on a flip, or challenging a low appraisal, comps are the raw data behind the number. Get them wrong and you overpay by $30,000. Get them right and you negotiate from strength. Every serious investor learns to pull their own comps rather than waiting for an agent's CMA or a bank's appraisal.
At a Glance
- What they are: Recently sold properties with similar characteristics used to estimate market value
- Ideal recency: 90 days for appraisers, up to 6 months for investors in slower markets
- Search radius: 0.5-1 mile in urban/suburban areas, up to 5 miles in rural markets
- Minimum count: 3 comps minimum for a reliable estimate, 5-6 for higher confidence
- Only SOLD properties count: Active listings show what sellers want, not what buyers pay
How It Works
Finding comps that actually match. Start with sold properties within a half-mile to one-mile radius that closed in the last 90 to 180 days. Filter by property type (single-family to single-family, not condo), bedroom count within one of your subject, and square footage within 20%. The tighter your filters, the more reliable your estimate — but in thin markets you may need to expand the radius or timeframe to find three solid matches.
Adjusting for differences. No two properties are identical, so you adjust each comp's sale price to reflect what it would have sold for if it matched your subject exactly. The comp has a two-car garage and yours has a carport? Add $12,000-$20,000. Square footage adjustments typically run $20-$50 per square foot depending on the market. The goal is to make each comp look like your subject on paper — then the adjusted prices converge on fair market value.
Reading the pattern. Three comps rarely give you one clean number. A tight cluster after adjustments means high confidence. A wide spread means your comps aren't truly comparable — or the market is shifting fast. The comp requiring the fewest adjustments is usually your strongest indicator.
Where investors pull comps. The MLS through an agent gives you the most complete data — sale price, days on market, concessions, condition notes. Public tools like Zillow and Redfin show sold prices but miss seller concessions. Investor platforms like PropStream layer on ownership data and off-market comparable sales. Cross-reference at least two sources.
Real-World Example
Jason Park is evaluating a 3-bed, 2-bath single-family listed at $335,000 in Mesa, Arizona. The house is 1,480 sqft with a two-car garage and no pool.
He pulls four sold comps within 0.8 miles that closed in the last 120 days:
- Comp 1: 3/2, 1,520 sqft, sold $328,000 — no garage (carport only)
- Comp 2: 3/2, 1,410 sqft, sold $312,000 — 70 sqft smaller, similar condition
- Comp 3: 4/2, 1,620 sqft, sold $349,000 — extra bedroom, 140 sqft larger
- Comp 4: 3/2, 1,490 sqft, sold $322,000 — nearly identical, dated kitchen
Jason adjusts: Comp 1 gets +$15,000 for the missing garage. Comp 2 gets +$3,500 for the sqft gap (70 x $50). Comp 3 gets -$10,000 for the extra bedroom and -$7,000 for size.
After adjustments: $343,000, $315,500, $332,000, $322,000. He drops the high outlier (Comp 1 needed the biggest adjustment) and averages the remaining three: $323,167.
The seller wants $335,000. Jason's comp analysis says $323,000 is closer to fair market value — a $12,000 negotiating gap backed by data, not gut feeling.
Pros & Cons
- Objective basis for offers — Comps ground your offer price in transaction data instead of gut instinct
- Negotiation leverage — Presenting adjusted comps to a seller shows you've done the work and strengthens your position
- Catches overpriced deals — A property listed $40,000 above adjusted comps is flagged before you waste time on inspections
- Works across strategies — Turnkey, flip, or wholesale — comps are the starting point for every valuation method
- Appraisal alignment — Pulling your own comps helps predict whether the bank's appraiser will hit your contract price
- Garbage in, garbage out — Selecting comps that don't truly match (wrong neighborhood, wrong condition) produces a misleading value estimate
- Adjustments are subjective — Two investors can adjust the same comp differently by $15,000 depending on market knowledge
- Thin markets starve the data — Rural areas or unique properties may have zero true comps within a reasonable radius
- Lagging indicator — Comps reflect what happened 30-180 days ago, so they can miss rapid appreciation or a downturn already underway
- Doesn't capture income potential — Comps tell you what buyers paid, not what the property earns as a rental
Watch Out
Never use active listings as comps. A house listed at $350,000 that hasn't sold proves nothing about market value. Only closed sales establish value. Pending sales are directional signals, but they're not comps until they close and the price is recorded.
Watch for seller concessions buried in the data. A comp that sold for $320,000 with $12,000 in seller-paid closing costs effectively sold for $308,000. The MLS sometimes notes concessions, but public sites rarely do. Missing this inflates your value estimate.
Don't stretch the radius to find comps you like. If you need to go two miles out to find a favorable comp while ignoring three lower-priced comps half a mile away, you're cherry-picking — and an appraiser will call it out.
Ask an Investor
The Takeaway
Comps are the single most important research skill in real estate investing. Every offer you write, every appraisal you receive, and every ARV you estimate starts with comparable sales data. Find 3-5 recently sold properties that match your subject in type, size, location, and condition — then adjust for differences until the prices converge on a defensible value. Master this and you'll never overpay because a listing price looked reasonable. You'll know what the market says a property is worth, and you'll have the data to prove it.