Appraisal Blog

Understanding the Role of Comparables (“Comps”) in Your Appraisal

When it comes to determining your home’s fair market value, nothing carries more weight than comparables, or “comps.” Whether you’re refinancing, selling, or securing a home equity line, an accurate appraisal hinges on choosing the right comps. This guide will explain what comps are, how appraisers select them, and how you can help ensure a smooth, accurate valuation.

What Are Comps?

Comparables (“comps”) are recently sold properties similar to yours in key aspects—location, size, condition, and amenities—and they serve as the benchmark for your home’s value. Appraisers typically use at least three closed sales within the past 3–6 months that are geographically close to your property realtor.com.

Key Attributes of Good Comps

• Proximity: Within one-half to one mile of your home
• Recency: Sold within the last 3–6 months (up to 12 months in slower markets)
• Similarity: Comparable square footage, lot size, age, and condition
• Style & Features: Similar number of bedrooms/bathrooms, garage size, and any significant upgrades

How Appraisers Select Comps

Appraisers follow a structured process when choosing comps:

Access to MLS Data - Most appraisers pull comps directly from the Multiple Listing Service (MLS), ensuring they use verified, arms-length transactions. Public records may supplement MLS data when needed appraisaltoday.com.

Bracketing Method - To account for differences, appraisers often bracket the subject property by including:

• One comp that’s slightly superior (e.g., larger lot)
• One comp that’s slightly inferior (e.g., fewer upgrades)
• One comp that closely matches

 Adjustments for Differences - If a comp has features your home lacks (or vice versa), appraisers make dollar-value adjustments. For instance, if your home has an extra bathroom, they subtract the estimated cost of that bathroom from the comp’s sale price.

Market Trends & Timing - In rapidly changing markets, older sales may require upward or downward adjustments for timing. Appraisers document these adjustments to reflect current conditions.

Why Comps Matter to You

1.  Accurate Valuation: Proper comps lead to a valuation that reflects true market value—protecting you from over- or under-pricing your home.
2. Lender Confidence: Lenders rely on an unbiased appraisal supported by solid comps to approve financing.
3. Strategic Pricing: As a seller, understanding comps helps you set a competitive asking price that attracts buyers quickly.

Tips to Help Your Appraiser

• Provide Your Own Comps List

Research and share 3–5 recent nearby sales that mirror your home’s characteristics.

• Document Recent Upgrades

Supply invoices or permits for major improvements (e.g., new roof, HVAC). This helps avoid negative adjustments.

• Clarify Unique Features

If your home has a rare feature—such as a private dock or solar panels—provide comparable sales with similar amenities.

• Stay Organized

Common Pitfalls to Avoid

• Using FSBO or Non-Arms-Length Sales: Sales between family members or distressed transactions can skew value.
• Ignoring Market Shifts: Don’t rely on outdated sales—markets can change quickly.
• Overlooking Small Differences: Even minor disparities (like a one-car vs. two-car garage) can result in significant adjustments.

Conclusion

Comparables are the backbone of any home appraisal. By understanding how they’re selected and adjusted—and by actively assisting your appraiser with accurate, organized information—you can help ensure a smooth, fair valuation of your property. Mastering comps puts you in control of your home’s financial destiny.

Note: This content was generated with AI assistance and reviewed by an experienced appraiser for accuracy.