Why It Matters
Sold comps are similar properties that have sold recently—same bed/bath, similar sq ft, same neighborhood. You use them to estimate market-value or arv for deal-analysis and brrrr. Sources: MLS, Zillow, Redfin, county records. Aim for 3–5 comps within 90 days. Apply adjustment-factors for differences. Sold-comps drive appraisals and your own valuation. Don't overpay—use comps to justify your offer.
At a Glance
- What it is: Similar properties that have sold recently
- Why it matters: Basis for market-value and arv
- Ideal: 3–5 comps, same bed/bath, same submarket, within 90 days
- Adjust for: Condition, size, features, sale date
- Sources: MLS, Zillow, Redfin, county records
How It Works
Selection criteria. Same bedroom and bath count. Similar square footage (±15%). Same neighborhood. Recently sold (ideally 90 days). Same property type. Arm's-length transactions (not family sales, estate sales, or distressed).
Data points. Sale price. Sale date. Bed/bath, sq ft. Days on market. Key features. Condition. Use this to build a comp grid.
Adjustments. Subject has 1,500 sq ft; comp has 1,400. Add $X per sq ft for the difference. Subject needs $20K in rehab; comp was turnkey. Subtract. Apply adjustment-factors to get an adjusted value for each comp. Average or median = estimated value.
ARV for value-add. For brrrr or fix-and-flip, use comps of renovated properties to estimate arv. Don't use distressed comps for ARV—use move-in-ready or turnkey-property comps.
Real-World Example
Marcus in Cleveland. Marcus was evaluating a fixer-upper for brrrr. He found 5 sold-comps of renovated 3-bed, 2-bath homes in the same neighborhood: $168,000, $172,000, $175,000, $178,000, $182,000. After adjustment-factors for lot size and garage, his arv range: $170,000–$176,000. He used $173,000 for his model. Purchase: $142,000. Rehab: $24,500. Total: $166,500. He had $6,500 cushion. He bought it.
Pros & Cons
- Objective basis for value
- Supports offers and deal-analysis
- Drives arv for value-add
- Aligns with appraiser methodology
- Comps can be thin in unique markets
- Requires judgment on adjustments
- Market moves—comps can stale quickly
Watch Out
- Wrong comps for ARV: Use renovated comps for ARV, not distressed
- Outlier comps: Toss obvious outliers; they skew the average
Ask an Investor
The Takeaway
Sold comps are the basis for market-value and arv. Get 3–5, adjust for differences, and arrive at a supported value. Use them for every purchase and brrrr analysis.