What are Comparables in real estate?

 What are Comparables in real estate?

A Comparable is a recently sold property in your area that’s similar to your property in location, size, condition and features.

How sellers use real estate Comparable

Sellers, especially those selling by themselves use comps to determine the right price for their property. Even if you’re selling your property with the help of a real estate agent, you’ll want to be familiar with Comparable so you can make sure you’re comfortable with the price your agent recommends.

How buyers use real estate Comparable

Buyers reference comparables to decide how much to offer on a property. More specifically, they want to make sure they don’t overpay for the property they’re buying.

How appraisers use real estate Comparable

When an appraiser comes to your property, they will source their own Comparable to help accurately assess how much your property is worth. Appraisals can happen for a couple reasons but most times sellers get an appraisal to help them accurately price their property.

How real estate agents use Comparable 

Real estate agents use Comparable from recently sold properties to create a comparative market analysis (CMA). It’s a collection of nearby Comparables, put together to help an agent and seller decide on a good price. Savvy real estate agents regularly run Comparable (even when not tied to one particular deal) to keep an eye on their local market and gauge overall trends.

How to find real estate Comparable

Sellers have two options for finding Comparable: hire an agent to guide them through the research and pricing process or find Comparable on their own.

What to consider when finding real estate Comparables

Aim to find at least three similar homes that meet the following criteria:

Location: Limit your search to the Location of the property.

Time frame: Only include properties that were sold within the past three months to one year — or less if your market is changing quickly.

Size: it must be within the same size per square metres or calculated out.

Bedrooms/bathrooms: Include properties with the same number of bedrooms and bathrooms as yours.

Condition of property: Factor in things like recent renovations, updated interiors or outdated features.

Age of property: Properties built around the same time as yours will be the most accurate Comparable, because major systems like roofs and plumbing should be in similar condition.

Nearby features: Find properties that align with yours in terms of features and amenities

Price per square metre: Real estate agents use price per square metre to identify comparables. Divide the sale price of a property by its square metres, then compare that number to your own desired price per square  metre.

further tips

No two Properties Comparables in your neighborhood are exactly alike — and even when properties are very similar, no Comparable is perfect.

So how do you identify the best Comparable? Stay as unbiased as possible. Try to set aside your emotional connection to your property and focus on the facts.

Only use sold properties

Ignore properties that are currently for sale or pending. Why? Sellers can overprice their properties and then end up settling for much lower. Until a property is sold, you’ll never get an accurate read on its value in your local market — it’s only worth what someone ends up paying for it.

Pay attention to the type of property.

If your property is a terrace, don’t compare it to semi-detached duplex or fully detached duplex. If you’re pricing a terrace to sell, don’t compare it to anything but other Terrace

Hire an appraiser

Not sure you’ve found the right price? Consider hiring a professional appraiser to give you an unbiased appraisal of your property's value. The cost is usually worth it to have an accurate price, especially if you live in a competitive market.

Avoid shortcuts

You can’t just double the price if your property is double the size of the comparable. There are many factors that go into property pricing, so don’t be tempted to take shortcuts by using poorly matched Comparable and guessing.