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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When people talk about why they’re not sure they can buy a home yet, they usually point to the obvious things. Prices feel high. Interest rates aren’t what they used to be. It sounds like every decent house has ten offers by Sunday night. All of that is real. And for some people, those factors genuinely do make buying unrealistic. But for a lot of first-time buyers, there’s something sitting just below the surface that they may not even be able to pinpoint themselves: the fear of getting pre-approved for a mortgage. On paper, getting pre-approved is simple. It doesn’t usually take that long. And within the real estate world, it’s treated as a basic first step — something buyers are somehow supposed to just know they should do before they even scroll through the photos of a listing online. What doesn’t get talked about nearly enough is how emotionally loaded that step can feel if you’ve never done it before. Because at a gut level, getting pre-approved can feel like asking a stranger to decide whether you’re worthy of buying a home at all — and if you are, how much you’re allowed to spend. For some people, that brings up anxiety, self-doubt, embarrassment, or a quiet fear of being told “no.” So if you’ve been thinking about buying your first home but keep finding reasons to delay that first step, it might not be about the market at all. It might simply be fear of the answer. The good news is you’re not the only person who feels this way — and with a little perspective, that first step is usually far easier and far less painful than it seems. Why Agents Often Don’t Realize How Scary It Can Feel Real estate agents ask prospective buyers whether they’re pre-approved early on in the process for practical reasons. They’ve seen deals fall apart because a buyer wasn’t financially prepared. They’ve watched people fall in love with homes they couldn’t actually buy. They know sellers take offers more seriously when a lender is already involved. And because agents live in this world every day, it’s easy for them to forget how intimidating that step can feel to someone doing it for the first time. To an agent, calling a lender is routine. To a buyer, it can feel like walking into a test they didn’t study for. None of this means agents are being dismissive or uncaring. Most simply don’t realize that what feels like a small, obvious step to them can feel enormous to someone else. That said, there’s no real way around it. Unless you’re buying with a large amount of cash, getting pre-approved is part of the process. Why It Can Be Scary for First-Time Buyers Some of the fears around pre-approval are very concrete: Is my credit good enough? Do I have enough saved for a down payment? Wait, how much money should I even expect to have for a down payment? What if the amount I’m approved for doesn’t match what homes actually cost in my area? (Or that I actually like enough to buy…) Those are reasonable questions. They’re also questions a lender can usually answer fairly quickly, often with more flexibility than people expect. But there’s another layer to this that doesn’t get addressed as openly. It’s the uncomfortable feeling that comes with handing over your financial life to someone you don’t know yet. Bank statements, debts, income—it can feel exposing. And if money has ever been a source of stress, shame, or insecurity for you, that vulnerability can hit harder than you expect. Many first-time buyers quietly worry they’ll be talked down to, rushed, or made to feel naïve. Or worse, that they’ll be told they’re not ready in a way that feels final or personal. The truth is, a pre-approval conversation isn’t a verdict on your worth. It’s a snapshot. It’s information. And in many cases, even a “not yet” comes with a roadmap that shows you how to get there. How to Find a Lender Who Is Good With First-Timers To be fair, not all lenders are the same. Some are fantastic with first-time buyers. Others may be completely capable of helping any buyer through the process, but lack a certain touch many first-time buyers would appreciate. One of the best ways to find a lender who understands the human side of this process is through a real estate agent. Agents usually work with multiple lenders and know which ones are patient, educational, and supportive—and which ones are better suited for more experienced buyers. Just as important, a good agent doesn’t wait in the wings until you’re “ready” to buy a home. They can be a sounding board while you’re figuring things out. Someone who helps you frame questions, normalize your concerns, and take the pressure off that first call or email. In many cases, agents are doing this long before anyone is touring homes or signing contracts—and usually without charging you for their time or advice. They understand that buying a home isn’t just a transaction; it’s an emotional decision layered on top of a financial one. The right agent and lender don’t judge where you’re starting. They help you understand it. And sometimes, just knowing you’re not taking that first step alone is enough to make it feel manageable. The Takeaway: While many people think that the thing holding most first-time buyers back are housing prices, mortgage rates, and stiff competition, there is often something hidden below the surface getting in the way for some buyers. While agents often look at it as a quick, easy, and fairly painless process, it’s often a scary process for first-time buyers because it can feel like you’re being judged and deemed worthy or not of buying a house. The reality is that getting pre-approved isn’t a judgment or a final verdict on your future as a homeowner. It’s simply a starting point. It gives you clarity instead of guesswork, and information instead of assumptions. And even if the answer isn’t exactly what you hoped for, it almost always comes with guidance on how to move closer to where you want to be. A good agent can connect you with the right lender who can make the process feel far less intimidating by answering questions, setting expectations, and having empathy for what it feels like to be in your shoes.
People are turning to AI for just about anything you can think of: Trying to figure out if a strange symptom is worth a doctor’s visit Drafting a text they’ve been overthinking for three days Deciding whether that noise coming from their car is “normal” or “you should probably pull over immediately” Even asking how to handle awkward conversations, negotiate a salary, or plan out major life decisions So of course, it makes sense that people buying or selling a home would turn to AI at different stages of the process. And to be fair, it can be incredibly useful. It can give you a general sense of how the process works, help you understand terminology, and prepare you to ask better questions. Ideally, it helps make things smoother. More efficient. More informed. But that really hinges on whether it’s actually giving you accurate information, and whether that information is being interpreted correctly. That’s not to say that AI always gives wrong or even bad advice. But one thing it always gives is…confident advice. And sometimes, that confidence can be misplaced. When Everyone’s AI Answer Is “Right”… Things Can Go Wrong A recent story making the rounds is a perfect example of how this can play out in real life. According to NewsNation , well-known celebrity agent Ryan Serhant shared how a major deal nearly fell apart because both sides were turning to AI for guidance during negotiations. Basically, the seller asked if they were accepting too low of an offer, and AI confidently said yes. On the other hand, the buyer asked if they were paying too much. And, wouldn’t you know it, they were confidently told that they were in fact overpaying. That led to both sides wanting to cancel the contract. The agents involved were able to step in, help their respective clients understand the market data, and ultimately bring the parties back together to salvage the deal. And that’s becoming a more common role in today’s market. Agents are having to help people navigate situations where the challenge isn’t a lack of information… but rather being too certain about the information they are receiving. Very Few People Actually Trust AI, Yet Many Still Follow Its Advice A recent survey found that while only 16% of people say they trust AI “a great deal,” yet many still rely on its answers when making decisions. Even more interesting: 58% of people admit AI has influenced their opinions 32% don’t fully understand how it generates answers And despite all of these things, many people still rely on the confident-sounding answer from AI over a trusted, verified source That’s a tricky combination. Because if you don’t fully understand how something works, it becomes very hard to recognize when it might be wrong. And when the answer is delivered in a way that sounds authoritative, it’s easy to accept it at face value. AI Is the New Dad in the Room In a way, none of this is entirely new. Real estate agents have been navigating this dynamic for years, it just typically comes from different sources. For instance: The well-meaning buyer’s dad at the home inspection. A relative who “sold a lot of houses” in their life. (It was two. And they were in the 80s and 90s.) Their hair stylist who knows every house on the market in town. That’s just to name a few examples. There are plenty of other people with thoughts and opinions they want to share with someone who is in the middle of buying or selling a home. And, while they come in all shapes and sizes, the one thing they all have in common is that they are absolutely, 100% confident in the advice they give. Unfortunately, their perspective and advice is often wrong or outdated, which puts the agent in a tough spot because they have to gently untangle advice that sounds logical, but isn’t actually good advice. People are often speculating how many jobs AI will replace in the near future. Will it replace the well-meaning friend or family member soliciting advice to home buyers and sellers? Probably not. Most likely AI will just be added to the list of outside advice agents have to help their clients assess and decide whether it’s accurate or not. And that’s really what this all comes down to. By all means, use AI. Ask it questions. Get a feel for things. Explore different angles. And while you’re at it, hear out the thoughts and advice of friends, family, and even that random person who sounds incredibly confident in what they’re saying. There’s nothing wrong with gathering input. But at the end of the day, just make sure you have an agent you trust helping you weigh the confident-sounding advice… so you can make a confident decision of your own. The Takeaway: More and more people are turning to AI for advice, and when it comes to buying or selling a home, that’s no exception. It can be a helpful starting point, giving you a general understanding of the process and helping you feel more prepared. The challenge is that AI often delivers confident answers that can sound right… even when they don’t fully apply. That’s why having a trusted agent matters. Not just to provide information, but to help you interpret what you’re hearing from AI (or even a well-meaning friend or relative), filter out what doesn’t apply, and guide you toward decisions that actually work in your specific situation.
Two Big Reasons To Move This Summer A lot of people who want to move are telling themselves the same thing: "Maybe I'll just wait until later this year once things calm down." While waiting sounds like a good plan, there's something worth knowing before you decide. Rates aren’t expected to change much, so if that’s the #1 reason you’re waiting, it may not pay off. And there may be other things you miss out on in the meantime. Historically, Summer is one of the strongest seasons of the year for both buyers and sellers. And if you delay your move until Fall or Winter, some of those opportunities may already be fading. Buyers: Fresh Inventory Is Your Real Summer Advantage One of the biggest frustrations buyers have faced over the past few years has been a lack of affordable options . Maybe you’ve run into that yourself: You find a house you like, but it's out of your budget. You find something in your budget, but you don’t like it. Or worse, nothing interesting hits the market for weeks. Historically, Summer helps with that. Looking at data from the last few years, Summer months consistently bring more sellers into the market than later in the year. And that gives buyers a real window of fresh choices. According to Realtor.com, any given Summer month typically sees about 32% more fresh options than the average month from September-December. With more newly listed homes, there’s a better chance of finding one you like where the numbers actually work. Because all it really takes is one home to completely change your search. And if you’ve got more popping onto the market to choose from, maybe one of those is exactly what you need. But keep in mind, this seasonal window isn’t open forever. Fresh inventory tends to slow down once Summer ends. Many homeowners who planned to sell this year have already listed by then. Families who wanted to move before school starts have often already gotten it done, or at least, set it into motion. So, new listing activity usually cools as we head into Fall and Winter. Of course, every year is different. But if finding the right home at the right price has been your biggest challenge, waiting until later in the year may not necessarily give you more options. In fact, recent history suggests it may do just the opposite. Sellers: Homes Usually Sell for More in the Summer If you're thinking of selling, you may be considering holding off because you've seen headlines about lower asking prices, price cuts, and softer conditions in some markets. But those headlines don’t tell the whole story or convey just how much it varies by area. Here’s what you really need to know. Even though the market’s becoming more balanced and some pockets are experiencing price declines, that doesn’t mean you’ve missed your chance to sell. Seasonality can still work in your favor no matter where you are . And this Summer could still give you the chance to sell for a good price. According to the National Association of Realtors (NAR), homes sold during a Summer month usually sell for about 4% more than homes sold during the typical month from September-December: Why? Summer buyers are usually operating on a set timeframe. They’re trying to move before the next school year or when they have more PTO and warmer weather to tour houses. That urgency can translate into better offers. Now, that doesn’t mean you should price your house 4% higher this Summer. That would actually be a mistake in today’s market. It just means if you’re looking to get as much for your house as you reasonably can, a Summer move could be a smarter play than waiting until later this year. Because based on typical seasonality , you may get more for your house than you would if you waited until the Fall or Winter (when there are typically fewer buyers active). And if you're considering a move anyway, that’s worth factoring in. Bottom Line Could waiting until later this year work out? Sure. But it's important to understand what you may gain by moving now too – that way you have the full picture before you decide. If a 2026 move is on your radar, let’s connect and talk about what matters most to you. Depending on your priorities, Summer could be your moment.
