What Are “Comps,” and What Do You Need to Know About Them in the Current Real Estate Market?

The Lighter Side of Real Estate • January 31, 2023

Every industry has jargon an outsider wouldn’t understand, and probably doesn’t need to know. But real estate is a field where almost every “outsider” needs a bit of insider knowledge in order to successfully buy, sell, or rent a place to live a few times in their lives.

For instance, you could go your entire life without hearing the term “comp” once, but the minute you decide to buy or sell a house you’ll hear agents say it like it’s a word you probably already know. It’s not nuclear physics, so you can probably figure out what they’re talking about, especially in the context they’re bringing it up. But just in case you’ve never heard the term before, “comp” is short for “comparable.”

Okay, but what exactly is a comparable?

Comparables are houses that are currently on the market, under contract, or (most importantly) recently sold. They’re used to compare against a house you’re planning to buy or sell, in order to establish approximately how much it should sell for in the current market. This helps you price it accurately as a seller, and know how much to offer as a buyer.

What makes a good comparable?

Comparables should be chosen in as objective a manner as possible, not to simply justify what you want to hear or think. Just because you want your house to be worth more than the data shows, doesn’t mean you can point to a house that sold for more and say it’s a true comp. Nor can you use a lower priced home as a comp to justify a low-ball offer, if it isn’t truly a good comparable for a house you’re trying to buy.

At times it can be pretty difficult for an agent or an appraiser to find many (or even enough) homes that are truly similar to the house you’re selling or buying, within a recent time frame. But ideally they are looking for houses that have:

  • Similar square footage.
  • Similar lot size.
  • Similar number of beds, baths, and other rooms.
  • Similar condition. (Like how updated or clean it is.)
  • Proximity to the subject property. (Ideally it should be fairly close by.)
  • Similar neighborhood or area.
  • Sold and closed recently. (Within three months is ideal.)

In a perfect world, they’d be able to find three similar homes that are currently on the market, three that are currently under contract, and three that have closed within the past three months, and use all of them in combination to determine how much you should list a house for as a seller, or offer for a house as a buyer.

The problem with comps in the current “shifting” market

Almost everyone in the industry, government, and media seems to agree that the market is “shifting” right now. But it’s difficult to pinpoint what that means exactly, and opinions vary from one person to the next. Considering prices were skyrocketing and at all-time highs in the past few years, you’d think that meant prices are now coming down. What else could shifting mean?!

Well, it doesn’t necessarily mean that prices are going down in your area or price range. It also doesn’t seem to be translating into a buyers’ market everywhere either.

Data and news reports indicate that there are fewer houses selling, and it’s taking longer for them to sell in some areas than it has been in the past few years. But in many areas prices don’t seem to be plummeting, or even falling. In some areas prices are stable or even increasing.

The shift is affecting the market differently from one area to another, and one price range to another, so you can’t go by nationally based data and reports. You need to rely on good local comps to determine the value of a house you’re selling or buying.

But here are a few problems with comps in the current market that you need to be aware of:

  • There often aren’t enough of them. Inventory has been low, and continues to be low, so it can be tough to find 3 houses in each category of a proper analysis. Beyond that, it’s tough to find enough that are similar enough to a subject property.
  • Might need to look back further than 3 months. It’s never ideal to look back beyond three months, but due to the low number of listings and sales, it’s often necessary to do so. Unfortunately, a house that closed within the past three months is often just a sign of what the market was like as much as 5 or 6 months ago, because houses take a month or two to close after being listed even if they go under contract right away. So that data is more proof of what the market was like before or early on in the shift.
  • Won’t see “proof” of values shifting for months. To truly know if prices are going down, it may take a few months of purchases to tell the true tale.

So right now, sellers are often hanging onto “proof” that their house is worth a certain amount based upon sales prices that occurred when prices were at all-time highs. On the other hand, buyers often feel like prices should be coming down, based upon news of the market shifting, and the fact that interest rates going up have affected their buying power, but they don’t necessarily have “proof” to justify lower offers.

In the meantime, while the data catches up with the shift, your best bet is to rely on your agent’s experience and observations in the current market. What have they been seeing happen in your local area and price range? There may not be hard data to pull up yet, but a local agent is a good barometer for what buyers have been offering, how much sellers have been accepting, and how supply and demand has affected those two things in your area.

While comps are useful in determining values and how much to offer or accept for a house, when the market’s shifting you need to rely on your agent’s ability to gauge where the market is currently going before the proof actually appears in the form of comps.

The Takeaway:

“Comps” are short for the real estate term “comparables,” which are basically houses that are similar in size, location, and condition to a house you are selling or buying.
In a shifting market like we’re currently experiencing, it can be difficult to find enough comps, or get a true feel for where the market is going, because it takes time for houses to actually close. So the data can lag a bit.
Your best bet right now is to use comps as a basis, but also rely heavily on your agent’s experience and observations of what is actually happening in your area and price range currently.


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Thinking About Renting Your House Instead of Selling? Read This First.

By KCM • September 13, 2025
Thinking About Renting Your House Instead of Selling? Read This First. If your house is on the market but you haven’t gotten any offers you’re comfortable with, you may be wondering: what do I do if it doesn’t sell? And for a growing number of homeowners, that’s turning into a new dilemma: should I just rent it instead? There’s a term for this in the industry, and it’s called an accidental landlord . Here’s how Yahoo Finance defines it: “These ‘accidental landlords’ are homeowners who tried to sell but couldn’t fetch the price they wanted — and instead have decided to rent out their homes until conditions improve.” Why This Is Happening More Often Right Now And right now, the number of homeowners turning into accidental landlords is rising. Business Insider explains why: “While there have always been accidental landlords . . . an era of middling home sales brought on by a steep rise in borrowing rates — is minting a new wave of reluctant rental owners." Basically, sales have slowed down as buyers struggle with today’s affordability challenges. And that’s leaving some homeowners with listings that sit and go stale. And if they don't want to drop their price to try to appeal to buyers, they may rent instead. But here’s the thing you need to remember if renting your house has crossed your mind. Becoming a landlord wasn’t your original plan, and there’s probably a reason for that. It comes with a lot more responsibility (and risk) than most people expect. So, if you find yourself toying with that option, ask yourself these questions first: 1. Does Your House Have Potential as a Profitable Rental? Just because you can rent it doesn’t mean you should. For example: Are you moving out of state? Managing maintenance from far away isn’t easy. Does the home need repairs before it’s rental-ready? And do you have the time or the funds for that? Is your neighborhood one that typically attracts renters, and would your house be profitable as one? If any of those give you pause, it’s a sign selling might be the better move. 2. Are You Ready To Be a Landlord? On paper, renting sounds like easy passive income. In reality, it often looks more like this: Midnight calls about clogged toilets or broken air conditioners Chasing down missed rent payments Damage you’ll have to fix between tenants As Redfin notes: “Landlords have to fix things like broken pipes, defunct HVAC systems, and structural damage, among other essential repairs. If you don’t have a few thousand dollars on hand to take care of these repairs, you could end up in a bind.” 3. Have You Thought Through the True Costs? According to Bankrate, here are just a few of the hidden costs that come with renting out your home: A higher insurance premium (landlord insurance typically costs about 25% more) Management fees (if you use a property manager, they typically charge around 10% of the rent) Maintenance and advertising to find tenants Gaps between tenants, where you cover the mortgage without rental income coming in All of that adds up, fast. While renting can be a smart move for the right person with the right house, if you’re only considering it because your listing didn’t get traction, there may be a better solution: talking to your current agent and revisiting the pricing strategy on your house first. With their advice you can rework your strategy, relaunch at the right price, and attract real buyers to make the sale happen. Bottom Line Before you decide to rent your house, make sure to carefully weigh the pros and cons of becoming a landlord. For some homeowners, the hassle (and the expense) may not be worth it.

Condos Could Be a Win for Today’s Buyers

By KCM • August 29, 2025
Condos Could Be a Win for Today’s Buyers Not every homebuyer wants the biggest house on the block. Some want something simpler, more affordable, and easier to maintain, especially in a market where every dollar counts. That’s where condos come in. For first-time buyers, they can be a smart way to get into homeownership without stretching your budget. For downsizers, they offer less space to maintain with the flexibility to stay in a great location. And right now, condos are one of the most buyer-friendly parts of the market. Condo Inventory Is Up, And That Means More Choice According to the National Association of Realtors (NAR), there are 194,000 condos for sale right now. That’s the second highest amount we’ve seen in the last three years (see graph below): Just remember, this is the national figure. The exact number is going to vary based on where you’re looking to buy. But, generally speaking, you have more options and less competition. You’re not stuck waiting for something to pop up or rushing into an offer just to beat someone else to it. You’ve got plenty to choose from. And if you’re particular about layout, location, or amenities, this is your chance to be selective. That’s a big shift from the market frenzy of just a few years ago. Compared to early 2022, we’ve got nearly double the condos available now. That gives you more breathing room to find the right fit. Prices Are Cooling, and Buyers Hold More Negotiating Power And since there are more for sale, many sellers are more open to negotiating right now. So, you may be able to get a better price. As Redfin explains: “. . . condo buyers in many cities may be able to find sellers who are willing to give concessions and/or sell for less than their asking price.” Condo prices are starting to ease in many markets. According to Intercontinental Exchange (ICE), condo prices dipped 1.3% in June compared to last year. And over half of the top 100 U.S. metros saw condo prices drop slightly year-over-year. Data from Redfin shows what the recent dip in prices looks like (see graph below): That doesn’t just help with affordability, it also shifts the power dynamic. Condo buyers in many markets are now in a position to negotiate on price and ask for concessions, like help with closing costs. Bottom Line Condos aren’t just a fallback option. In today’s market, they’re one of the most strategic ways to buy. With more options, softening prices, and more room to negotiate, now could be the right time to make your move. Could a condo check more boxes than you expected? Let’s talk through your options and find out.

More Contracts Are Falling Through. Here’s How To Get Ahead.

By KCM • August 23, 2025
More Contracts Are Falling Through. Here’s How To Get Ahead. When you sell a house , the last thing you want is for the deal to fall apart right before closing. But according to the latest data from Redfin, that’s happening a bit more often lately. The good news is, it’s completely avoidable if you lean on an agent for insight into why that is and how to avoid it happening to you. This June, 15% of pending home sales fell through . That means those buyers backed out of their contracts. That’s not too much higher than the norm of roughly 12% from 2017-2019, but it’s still an increase. And it’s one you don’t want to have to deal with. The key to avoiding this headache is knowing what’s causing the issues that lead to a buyer walking away. A recent survey from John Burns Research and Consulting (JBREC) and Keeping Current Matters (KCM) finds that agents reported the #1 reason deals are falling apart today is stemming from the home inspection (see graph below): Here’s why. With high prices and mortgage rates stretching buyers’ budgets, they don’t have a lot of room (or appetite) for unexpected repairs. Not to mention, buyers have more options to choose from now that there are more homes on the market. So, if the inspection turns up a major issue, they may opt to walk away. Afterall, there are plenty of other homes they could buy instead. Or, if the seller isn’t willing to tackle repairs , a buyer may back out because they don’t want the expense (and the hassle) of dealing with those issues themselves. The good news is, there’s a way you can get ahead of any unpleasant surprises as a seller, and that’s getting a pre-listing inspection. It’s not required, but the National Association of Realtors (NAR) explains why it’s helpful right now: “To keep deals from unraveling . . . it allows a seller the opportunity to address any repairs before the For Sale sign even goes up. It also can help avoid surprises like a costly plumbing problem, a failing roof or an outdated electrical panel that could cause financially stretched buyers to bolt before closing .” What’s a Pre-Listing Inspection? It's exactly what it sounds like: a professional home inspection you schedule before your home hits the market. Here’s what it can do for you: Give you time to fix what matters . You’ll know what issues could come up in the buyer’s inspection. So, you’ll have time to take care of them before anyone even walks through the door. Avoid last-minute renegotiations . When buyers uncover unexpected issues after you’re under contract, it opens the door for concessions you may have to make like price drops or repairs, or worse, a canceled deal. A pre-listing inspection helps you stay ahead of those things before they become deal breakers. Show buyers you’re serious . When your home is clean, well-maintained, and already vetted, buyers see that. It builds trust and can help you sell faster with fewer back-and-forth negotiations. The bottom line? A few hundred dollars upfront can save you thousands later. Should Every Seller Do This? Not necessarily. Your real estate agent can help you decide what makes the most sense for your situation, your house, and your market. If you decide to move forward with a pre-listing inspection, your agent will guide you every step of the way. They’ll: Advise on whether to fix or disclose each issue Help you prioritize repairs based on what buyers in your area care about Make sure you understand your local disclosure laws Bottom Line If you want to avoid potential snags in your deal, a pre-listing inspection could be the way to go. Let’s talk about whether a pre-listing inspection is the right move for your house and market. Would you rather find out about a major repair now, when you can handle it on your terms – or after you’re under contract, when the clock is ticking?
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