The Term “Comps” or Comparables Explained

The Term “Comps” or Comparables Explained

I would never recommend comparing yourself or your life to someone else’s. However, I would recommend looking up the comps on your property or a property you’re interested in purchasing! 

Comps (short for comparable) are formed from the value of a recently sold property that is similar to the one that you own. In this case, you are “comparing” other properties to yours that are similar in size, age, location, etc.

When you are considering selling your home there are several reasons you’ll want to know the comps for your home. 

First, the comps in your neighborhood could be higher than they ever have been, so it could be a good time to go ahead and make the most money on your home.  

Secondly, comps will help you determine what to list your house for. If you’re not sure how much to list it for, the comps in the neighborhood will help you determine what it will likely appraise for. This is important because most buyer’s will get a loan to buy the property and the loan will be dependent on the appraised value.

Third, if you are looking to buy, your agent should check the comps in the area for homes you are considering to make sure that the price is in fact, a fair price. If they know the comps are low for that particular home, overpriced, or right on the money, you will want & need to know! Again, the bank will only lend you the appraised value.

Comps will be based on homes that are similar to yours in square footage, number of bedrooms, bathrooms, lot size, age, and neighborhood, among other things.

If you’re curious what the comps are in your area, ask me today!

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