What make a great comparable?

A comparable, also known as a “comp”, often shares many elements and characteristics within the subject dwelling. One of the most important aspects of accurately valuing a property is precise selection of a comparable sale. When overlooked, a property can easily be over and/or undervalued. I’ll expand on three items that make a great comparable: time, location and utility. In mind opinion, these items are the backbone of providing a fair and unbiased real property appraisal on a residential orientated property.



Timely- occurred in relatively close timeframe as the effective date of the appraisal. Market conditions are in constant influx, therefore the more recent the sale, the more relevant in regards to current market conditions.


Close by- Location matters. Real estate is affected by social, economic and cultural elements. Coupled together, a similar type property can sell for thousands less just because of economic influences within the community such as a shutdown of a major employer.



Utility- the overall make up of the home beyond the bricks and the stick. Key variances such as lot size, square footage of the home, total number of rooms, bedrooms and bathrooms impact on real property valuation. Site improvements may enhance a sale but some features (such as above ground pools) may not contribute to the final estimate of value.

If we were considered an income generating property (ICI / Industrial, Commercial and/or institutional), further consideration must be given for all income and expense generating characteristics, which typical takes precedent over the aforementioned items.


As you can see, the level and scope of work is quite time consuming during the Direct Comparison Approach.