How Comps Work: investor-focused definition
Real estate comps are comparable properties used to estimate value. Investors compare recent nearby sales with similar size, property type, bed and bath count, condition, and location.
What makes a good comp
A strong comp is nearby, recently sold, similar in property type, close in square footage, similar in bed and bath count, and comparable in condition.
Why condition matters
A fully renovated sale should not be mixed blindly with distressed or as-is sales when estimating after repair value.
How investors use comps
Investors use comps to estimate ARV, verify seller expectations, calculate MAO, and understand what cash buyers may pay.
Frequently Asked Questions
Comp means comparable sale, a similar property used to estimate value.
Recent sold comps from the last six to twelve months are usually preferred, depending on market activity.
Yes. Weak, old, distressed, or mismatched comps can make ARV too low or too high.
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