What Are Comparable Sales (Comps) in Real Estate?
Comparable sales—often called “comps”—are recently sold homes that are used to estimate a property’s market value. In New Jersey, comps are the foundation for pricing decisions made by homeowners, real estate agents, appraisers, and cash buyers alike.
At their core, comps answer a simple question:
What are buyers actually paying for similar homes in this area right now?
The key word is similar. Small differences in condition, layout, or timing can create large differences in value.
How Comparable Sales Are Used in New Jersey
Comps are used in several different contexts, and the purpose matters.
When a homeowner lists with an agent, comps are typically used to set a retail asking price—assuming the home is clean, functional, and market-ready.
When a bank orders an appraisal, comps are adjusted line by line to support a loan value, often conservatively.
When an investor or cash home buyer evaluates a property, comps are used to estimate the after-repair value (ARV) or the as-is value, depending on the property’s condition.
The same set of sales can produce very different numbers depending on how they’re being used.
What Makes a Sale a “Good” Comparable?
Not every nearby sale is a true comp. Strong comps usually share most of the following traits:
- Sold recently (typically within the last 3–6 months)
- Located in the same neighborhood or school district
- Similar square footage and layout
- Similar lot size and zoning
- Similar property type (single-family vs condo vs multi-family)
- Similar condition at the time of sale
Distance matters less than similarity. A house three blocks away in similar condition is often a better comp than a fully renovated home next door.
Condition Matters More Than Most People Expect
One of the biggest misunderstandings about comps is how heavily condition affects value.
A renovated home and a distressed home on the same street are not interchangeable comps.
Differences that significantly impact value include:
- Outdated kitchens or bathrooms
- Roof age or structural issues
- Water damage, mold, or foundation concerns
- Deferred maintenance
- Mechanical or electrical problems
- Vacant vs owner-occupied condition
Retail comps reflect what buyers pay for finished homes. As-is comps reflect what buyers pay for homes that still need work. Mixing the two creates unrealistic expectations.
Retail Comps vs As-Is Comps
This distinction is critical.
Retail comps come from homes that were:
- Updated or renovated
- Move-in ready
- Marketed through the MLS
- Sold to owner-occupants using financing
As-is comps come from homes that were:
- Sold with repairs needed
- Purchased by cash buyers or investors
- Sold off-market or with limited marketing
- Priced to reflect risk, repairs, and holding costs
A cash offer based on as-is comps is not a “discount” from retail value—it’s a different valuation model.
Why Zillow and Online Estimates Often Miss the Mark
Automated valuation models pull public data, not property-specific realities.
They usually cannot see:
- Interior condition
- Unpermitted work
- Structural issues
- Deferred maintenance
- Urgency of sale
- Buyer concessions or credits
Zillow numbers can be useful as a starting reference, but they are not a substitute for real comps reviewed by a human who understands the local market.
How Appraisers Adjust Comparable Sales
Appraisers don’t just pick three sales and average them. They make adjustments for differences such as:
- Square footage
- Bedroom and bathroom count
- Garages vs driveways
- Finished basements
- Renovation level
- Lot size
- Time (market shifts)
Two homes can sell for the same price and still produce very different adjusted values when compared to your property.
Why Two Houses on the Same Street Can Have Very Different Values
This surprises many homeowners, but it’s normal.
Differences in:
- Renovation quality
- Layout efficiency
- Maintenance history
- Timing of sale
- Buyer motivation
can easily create a $50,000–$100,000 gap—even on the same block.
Comps explain why that happens, not just that it happens.
Using Comps to Decide Your Best Selling Option
Many homeowners use comps to decide how to sell, not just what their home is worth.
Some choose to list and maximize price after repairs.
Others decide that speed, certainty, or avoiding repairs matters more than retail value.
Comparable sales help clarify that trade-off.
The Bottom Line on Comparable Sales
Comparable sales are not opinions—they’re evidence.
But evidence only works when it’s interpreted correctly.
Understanding comps helps homeowners:
- Set realistic expectations
- Avoid overpricing or underpricing
- Compare listing vs as-is options
- Make confident decisions based on facts, not guesses
A clear understanding of comps puts control back where it belongs: with the homeowner.