Comparable

A comparable (comp) is a recently sold or listed property used in the sales comparison approach to help estimate the value of a subject property. To be useful, a comp should be similar to the subject in location, size, age, condition and property type, and the sale should reflect arm’s-length market conditions.

Appraisers typically analyze multiple closed sales and may also consider active listings and pending sales as supporting market evidence. Each comparable is compared to the subject, and adjustments are applied to account for relevant differences, resulting in an adjusted sale price that reflects the subject more closely. These adjusted results are then reconciled to develop a final opinion of value.

The selection and quality of comparables is one of the most scrutinized aspects of the appraisal process. Weak comps, such as those that are too dissimilar, outdated or influenced by atypical conditions, can distort value conclusions and lead to questions during underwriting or appraisal review.