What is Comparable Sales (Comps)?
Comparable sales, commonly called comps, are recently sold properties that are similar to a subject property in terms of location, size, age, condition, and features. Comps are the foundation of property valuation in real estate, used by investors, appraisers, and lenders to establish what a property is worth in the current market. For distressed property investors, comps are essential for calculating after-repair value (ARV) and determining maximum purchase prices.
The most reliable comps share these characteristics with the subject property: located within a half-mile radius (or the same neighborhood), sold within the last 3-6 months, similar square footage (within 10-20%), similar bedroom and bathroom count, similar lot size, and in renovated condition (for ARV comps). Adjustments are made for significant differences — for example, adding value for an extra bedroom or subtracting for a smaller lot.
In distressed property markets, finding accurate comps can be challenging because many transactions occur off-market and may not be reported at full detail. Investors often track two sets of comps: 'as-is' comps (what similar distressed properties have recently sold for) to validate their purchase price, and 'renovated' comps (what similar properties in good condition have sold for) to estimate ARV.
Ugly House Finder provides property details including year built, lot size, bedrooms, bathrooms, and tax assessment values that help investors quickly evaluate whether a distressed property's characteristics match available comps in the area.
Example
Three comparable sales of renovated homes within two blocks sold for $155,000, $162,000, and $148,000, establishing an ARV of approximately $155,000 for the distressed property under evaluation.
Related Terms
After-Repair Value (ARV)
The estimated market value of a property after all planned renovations and repairs are completed.
Fix and Flip
An investment strategy where an investor buys a distressed property, renovates it, and sells it for a profit.
Maximum Allowable Offer (MAO)
The highest price an investor should pay for a property to maintain target profit margins after renovation and selling costs.
Frequently Asked Questions about Comparable Sales (Comps)
What does Comparable Sales (Comps) mean in real estate?
Recently sold properties similar in size, location, and features used to estimate a property's market value.
Why is Comparable Sales (Comps) important for distressed property investors?
Comparable Sales (Comps) is a foundational concept for investors using AI-powered tools like Ugly House Finder. Understanding it helps you correctly interpret distress scores, communicate with sellers, and evaluate deals against the U.S. Census Bureau housing data and Google Street View imagery the platform uses. Three comparable sales of renovated homes within two blocks sold for $155,000, $162,000, and $148,000, establishing an ARV of approximately $155,000 for the distressed property under evaluation.
How does Ugly House Finder use Comparable Sales (Comps) data?
Ugly House Finder integrates comparable sales (comps) into its property analysis workflow. The platform combines visual AI scoring of Street View imagery with neighborhood context from the U.S. Census Bureau's American Community Survey, surfacing properties where comparable sales (comps) indicates strong investment potential.
Sources & Further Reading
- U.S. Census Bureau, American Community Survey (ACS) 5-Year Estimates — census.gov/programs-surveys/acs
- HUD Office of Policy Development and Research — huduser.gov
- National Association of Realtors Research & Statistics — nar.realtor/research-and-statistics