Comparable Sales (Comps)

Definition

Recently sold similar properties used to determine market value, essentially determining price by analogy.

Example Usage

The appraiser used three comps to justify the $350,000 valuation, all within a mile and three months old.

Origin

Appraisal and valuation methodology

Fun Fact

Comps can be selected favorably or unfavorably depending on who's doing the selecting, making appraisals somewhat subjective.

Source: Real estate valuation practices

Related Terms

Beginner

seller concessions

When sellers agree to pay some of the buyer's closing costs, essentially discounting the price through the back door. A negotiation tactic that makes everyone feel like they won when really they just moved money between different piles.

🏠 Real Estate

Beginner

fixture

Personal property that has been permanently attached to real estate and legally becomes part of the property. The eternal battleground of what stays and what goes when you sell.

🏠 Real Estate

Advanced

air rights

The property rights to use the vertical space above a parcel of land, which can be sold separately from the land itself. In dense cities, this lets you literally monetize thin air by selling the right to build above your property.

🏠 Real Estate

Beginner

comparables

Recently sold properties used to determine market value, cherry-picked by whichever party needs to prove their point. The art of comparing apples to slightly different apples.

🏠 Real Estate

Beginner

MLS

Multiple Listing Service—a database where real estate agents share property listings and cooperate on sales. The original social network, except everyone's trying to sell you houses.

🏠 Real Estate

Intermediate

Comparative Market Analysis (CMA)

A valuation method comparing a property to similar recent sales in the area, also known as 'pretending your house is worth what you want it to be.'

🏠 Real Estate

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