How Agents Use ‘Comps’ to Price Your Home (and What You Should Know)
Why did your neighbor’s house sell in three days while yours has been sitting for weeks?
In many cases, the answer comes down to pricing accuracy, and behind every accurate listing price is a tool called a real estate comp, short for comparable sale. These comps are the foundation of smart pricing strategy, used by real estate agents, brokers, and appraisers alike.
Understanding how agents use comps to price your home helps you get ahead, whether you’re selling, buying, or just planning your next move. For sellers, comps help set a competitive list price that attracts buyers and avoids sitting stale. For buyers, knowing how to evaluate comparable properties helps you spot fair deals and avoid overpaying.
Over the years, I’ve completed thousands of comparative market analyses (CMAs), learning not only from experience but also from my wife, a former real estate appraiser. That foundation taught me something crucial: pricing a home correctly isn’t guesswork. It’s a mix of accurate market research, recent sales data, and deep local insight.
Let’s dive into how comps really work, what makes a good comp, and how this knowledge can give you a serious edge in today’s housing market.
What Are Real Estate Comps?
Real estate comps, short for comparable sales, are recently sold properties that are similar to the home you’re buying or selling. They serve as a benchmark for estimating the fair market value of a property based on actual buyer behavior.
Comps or comparable home sales, are what appraisers use to value property. Realtors and real estate brokers use comps to give people an opinion of value or a comparative market analysis.
While the sales price of a home grabs attention, it’s the comps that explain whether that price is realistic. They offer critical context by comparing your property to other recently sold homes with similar characteristics, like square footage, number of bedrooms and bathrooms, and neighborhood location.
A skilled real estate professional will rely on accurate real estate comps to create a competitive list price that reflects both market conditions and buyer demand. Likewise, buyers use comps to determine if the asking price aligns with market value or feels inflated.
Not all comps are created equal, though. Knowing how to identify the right comparable home sales and adjust for key differences is what separates a solid pricing strategy from a shot in the dark.
What Makes a Property a Good Comp?
Not every recently sold property qualifies as a good comp. To generate an accurate estimate of your home’s value, an agent must identify comparable properties that meet several important criteria. Think of it as a filtering process: choosing similar properties that truly reflect your home’s market position.
Proximity and Timeframe
A good comp should be located in the same neighborhood or within one mile of the property being evaluated. This proximity ensures similarities in school zones, amenities, and local trends.
Time is another key factor. We rely on recent sales prices, ideally from the last three to six months, because the local real estate market can shift quickly. Using recent sales prices quick ensures that your price reflects current demand and not outdated values.
Similar Size and Layout
Size compatibility forms the backbone of accurate comps. I target properties within 150 to 250 square feet of the subject home. This range accounts for minor differences while maintaining meaningful comparisons.
Beyond square footage, I match bedroom and bathroom counts, garage spaces, and general floor plans. A three-bedroom, two-bath, two-car garage home needs to be compared against similar configurations. Even if two homes look identical from the street, their internal layouts can significantly impact value.
Matching Features and Conditions
Beyond the basics, property details matter. Two homes with the same footprint may differ dramatically in value due to renovations, upgrades, or wear and tear.
An experienced real estate agent will look at features like:
- Age and condition of the roof, HVAC, and major systems
- Flooring type and overall finish quality
- Kitchen and bathroom updates
- Garage size and parking options
- Outdoor living spaces, like covered patios or landscaped yards
Homes in pristine condition with modern updates will pull higher comps, while dated or worn properties fetch less, even if their living space is identical.
Identifying appropriate comps means comparing apples to apples, not apples to oranges. That’s why professional appraisals, CMAs, and access to the multiple listing service (MLS) are essential tools for finding and refining the right data.
Adjusting for the Details That Matter
Raw sales data only tells part of the story. The real skill comes in adjusting comp values based on differences between properties.
Seller-Paid Concessions
This factor trips up more agents than any other, yet it has an enormous impact on actual value. When a home sells for $350,000 but the seller pays $10,000 toward the buyer’s closing costs, the real comparable value is $340,000—not $350,000. Failing to account for those concessions means presenting an inflated number, which ultimately does a disservice to the client.
Public websites like Zillow don’t show concessions, so many sellers overprice their homes based on incomplete information. Only agents with MLS access can view the complete financial breakdown of sales, including seller concessions, repair credits, and other behind-the-scenes negotiations.
HVAC Systems and Other Upgrades
Here in Albuquerque, the difference between refrigerated air and swamp coolers represents a $4,000 to $8,000 adjustment. Swamp coolers—those water fans sitting on rooftops—only provide about a 20-degree temperature spread. Most buyers prefer the comfort and reliability of full HVAC systems.
Other significant adjustments include:
- Roof condition and age
- Countertop materials (granite versus Formica)
- Flooring types and condition
- Overall home updates and renovations
- Fireplace count and condition
- Backyard landscaping quality
- Covered patio presence
Location Perks and Views
Mountain views can add $5,000 to $15,000 or more to a home’s value, depending on the quality and scope of the vista. Proximity to hiking trails, parks, or highly-rated schools also impacts pricing.
These location-specific factors require local market knowledge that online valuation tools simply cannot capture. An experienced agent understands which views command premiums and how much buyers will pay for specific neighborhood amenities.
Why Zillow Isn’t Telling the Whole Story
Online tools like Zillow, Redfin, and Realtor.com can be a helpful starting point, but they’re just that: a starting point. These platforms pull public property records, recent sales, and active listings to generate an estimated price. But they don’t have access to critical details that make or break a home’s true value.
Here’s what they miss:
No Visibility Into Seller Concessions
As mentioned earlier, if a seller agrees to pay $10,000 in closing costs, that’s not reflected in the public sales price. Zillow still lists the full amount, which leads to inaccurate home value estimates and skewed comparable sales.
No Adjustments for Property Condition or Upgrades
Zillow doesn’t know if the kitchen was remodeled last year or if the roof is leaking. It can’t evaluate living space upgrades, HVAC system replacements, or outdated interiors, but real buyers can, and so can your agent.
No Local Market Context
Online tools can’t interpret market conditions or account for shifts in supply and demand in specific neighborhoods. They don’t know if a bidding war drove a home’s final price up or if that sale included a second appraisal or repair credit behind the scenes.
Limited Data Sources
Most online tools don’t have access to the local MLS, where the most accurate, up-to-date information lives. That means they’re working with incomplete data sets, and pricing insights based on those sets will always have limitations.
The bottom line is Zillow might give you a ballpark figure, but it won’t give you a competitive list price or a fair market value that reflects what buyers are actually paying in your neighborhood.
Local real estate agents use MLS data and real-world experience to craft accurate, customized CMAs based on similar properties, market trends, and comparable sales that online tools can’t match.
My Story: From Appraisal Rookie to CMA Expert
Early in my real estate career, I had an unfair advantage, my wife, Danielle, was a professional real estate appraiser. For nearly a decade, she handled every comparative market analysis (CMA) for me. I focused on relationships and negotiations, while she quietly ensured we were always pricing homes with precision.
But everything changed when our son was born and Danielle stepped away from appraising. Suddenly, I had to learn how to run CMAs myself and fast. The timing? Right around the 2009 housing market crash, when banks were scrambling for broker price opinions (BPOs) to value distressed real estate properties.
Danielle trained me on how to evaluate comparable properties, identify key factors like square footage, property condition, and market value, and account for differences like living space or bedrooms and bathrooms. Together, we completed hundreds of BPOs, earning $30 to $50 each. That may not sound like much, but over time, it added up to both $15,000 in income and a deep understanding of real estate comps.
Each BPO was a mini market lesson. I learned how to find recently sold homes, adjust for other factors like location or upgrades, and determine the fair value of any house. Now, I can estimate the value of most homes almost instinctively. Of course, I still prepare formal CMAs for every listing, but I often know what a property’s worth before I even pull the data.
That hands-on training was better than any class or certification. It’s what gave me the edge I use today to help clients price with confidence, avoid inflated prices, and sell for top dollar in any kind of market.
Why an Experienced Agent Still Matters
Technology provides powerful tools, but human expertise makes the difference between accurate and misleading valuations. Strong agents combine market knowledge, pricing psychology, and appraisal experience to deliver precise CMAs.
The best agents understand local market nuances that algorithms miss. They know which neighborhoods are trending up, which features buyers prioritize, and how to price homes for quick sales versus maximum value.
Having a realtor that knows the market and knows how to complete a comparative market analysis quickly and accurately is really an important key. That should be one of your top five questions—how much experience do they have and how accurate are they on their evaluations?
Ready to Discover Your Home’s True Value?
If you’re wondering what your home is really worth not just what your neighbor’s house sold for, let’s talk. I’ll show you the data, the comps, and what buyers are actually paying in your neighborhood.
A proper CMA reveals more than numbers. It uncovers market opportunities, identifies pricing strategies, and positions your home for success. Whether you’re selling now or planning for the future, understanding your home’s true value empowers better decisions.
Contact Absolute Real Estate for a comprehensive market analysis. Together, we’ll cut through the online estimates and discover what your home is actually worth in today’s market.
