What Are Comps? A Way to Pin the Right Price on a Home
Homes are unlike the majority of other things people buy in that the price isn’t set in stone. Sure, the listing might include an “asking price,” but as this term suggests, that’s just a request rather than a hard, unwavering demand. And that’s why comps are so important. So what exactly are comps?
Short for housing “comparables,” comps are a way to help you figure out what a home is worth based on the recent sales prices of similar properties in the area. Home sellers (and their real estate agents) use comps to help them come up with their asking price, while buyers can use comps to come up with how much to offer. As such, it’s an important concept for both buyers and sellers to master.
Here are the basics on how to find comps and wield them to your advantage.
What to know about comps
With housing comps, you ideally want to compare apples to apples—not apples to kiwi (which is, let’s face it, a strikingly unappealing fruit).