Using Comparable Home Sales to Support Your Offer
Smart home buyers use comparable home sales to support their offers. This is one of the best ways to evaluate local market conditions and sale prices.
Best of all, you can find this data online for free. You can research these "comps" by using a website like Zillow or Realtor.com.
This guide explains what comparable sales are, how to choose the best ones, and how to use them when making an offer on a house.
What Are 'Comparable Sales' Exactly?
Definition: In real estate, "comparable sales," often referred to as "comps," are recently sold properties that are similar in key characteristics to the property being bought or sold.
(Note: The rest of this guide uses the term "subject property." In a home buying scenario, this is the property that the buyers are evaluating and thinking of buying.)
The key characteristics of comparable sales include:
- Location: Proximity to the subject property, neighborhood, and surrounding amenities.
- Size: Square footage, number of bedrooms and bathrooms.
- Style: Architectural style (e.g., ranch, colonial, contemporary).
- Age: How old is the home, compared to the subject property?
- Condition: Overall condition of the property (e.g., updated, needs repairs).
- Amenities: Features like a pool, garage, fireplace, and yard size.
How Different Groups Can Use Comps
Different people use comparable sales for different reasons. But in all cases, the comp itself is the same. It's a recently sold home similar to the subject property.
Here's how different groups use this data to accomplish their objectives:
Buyers can use comps to help determine how much to offer for a particular home, based on recent sales activity in the area. This can increase the chance of having their offer accepted.
Sellers can use comps to determine the asking price for their home, by analyzing recent sales of similar properties. This can help attract buyers and increase the chance of a sale.
Agents can use comps to help their clients evaluate the seller's asking price, to find out if it's realistic or far-fetched based on local market conditions.
Example: John and Sarah Buy a Home
Here's an example scenario that shows how home buyers can review recent and comparable sales data to determine how much to offer for a particular home.
Buyers: John and Sarah Smith, a young couple looking to purchase their first home.
Location: Denver, Colorado
Desired Home: A 3-bedroom, 2-bathroom, single-family home in the popular North Park Hill neighborhood.
The Property: They have found a charming 3-bedroom, 2-bathroom bungalow in North Park Hill listed at $650,000. The home features hardwood floors, a finished basement, a fenced backyard, and a detached garage.
Identifying Comps: To determine if the asking price is reasonable, John and Sarah, with the help of their real estate agent, identify several comparable properties that have recently sold in the same neighborhood:
Comparable 1:
- 3-bedroom, 2-bathroom bungalow
- Sold for $625,000
- Similar square footage, updated kitchen, smaller backyard
- Adjustment: +$10,000 for larger yard
Comparable 2:
- 3-bedroom, 2-bathroom ranch
- Sold for $675,000
- Larger square footage, updated bathrooms, no basement
- Adjustment: -$20,000 for no basement, -$15,000 for different style
Comparable 3:
- 3-bedroom, 2-bathroom bungalow
- Sold for $640,000
- Similar square footage, older kitchen and bathrooms, larger lot
- Adjustment: -$5,000 for outdated kitchen/bathrooms, +$15,000 for larger lot
Analysis: After analyzing these comps and making adjustments for differences between the subject property and each comparable, John and Sarah (with their agent's guidance) can determine a more accurate market value for the home they are interested in.
Note: This is a simplified example. In reality, real estate agents often use software to arrive at a reliable market value estimate.

The Three Qualities of a Good Comp
In order to be useful, comparable home sales should have the following qualities:
1. Comps should be recent.
A home that sold six months ago isn't a very good indicator of the current market. So you want to try to find homes that sold recently. The more recent the sale, the more it reflects the current market conditions.
2. Comps should be similar.
If you're looking for a two-story colonial in the $450,000 price range, it doesn't make sense to look at sales data for single-story ranch homes in the $380,000 price range. It's not comparable, so it doesn't help you evaluate the seller's asking price. "Comparable" and "similar" are synonyms, after all.
3. Comps should be nearby.
Real estate markets vary widely from one area to another. A house that's selling for $500,000 on the north side of town might go for $385,000 on the south side.
So if you want to justify the selling price of a particular home, you need to use comparable home sales from the same area -- the same neighborhood, if possible. This will give you a more accurate picture of the local market.
If you want to use comparable sales to support your offer, you should make sure those sales are recent, similar, and located within the same geographic area.
7 Key Points to Take Away From This
Here are the most important points you should take away from this guide:
- Using recent sales data for similar homes can help you make a competitive and informed offer.
- Websites like Zillow and Realtor.com allow you to research comparable sales data for free.
- Focus on location, size, style, age, condition, and amenities to identify comparable properties.
- Homes sold within the past few months better reflect current market conditions.
- Use comps from the same neighborhood or area to account for local market variations.
- A real estate agent can guide you in selecting and analyzing comps to make an informed offer.
- Consider differences between the property you're buying and the comps (e.g., larger yard, updated kitchen) and adjust prices accordingly.
We hope this guide helps you make a stronger and smarter offer when buying a home!