Comps are recent closed sales of homes similar enough to the one being valued that their prices can stand in for its value, once each sale has been adjusted for the ways it differs from the subject property.
Comparable is a relative word, and that is the difficulty. No two houses are the same, so the work is not finding identical sales; it is finding sales close enough that the differences can be priced, and then pricing them.
The same sales are used three ways by three parties, which is why an agent's number, an appraiser's number and an automated estimate can all be built from comps and land in different places.
What makes a comparable comparable
Five filters do most of the work: recency, proximity, size, type and condition. A sale from the last three to six months, within a mile in a suburban market or the same subdivision where one exists, within roughly ten to fifteen percent on square footage, the same property type and story count, and roughly the same age and level of finish. Beyond those, the things a buyer would notice: bedroom and bathroom count, garage spaces, lot size, a pool, a view, and whether the house backs onto a busy road.
Two filters matter more than they look. It has to be a closed sale, because an asking price is a hope. And it has to be an arm's length sale: a transfer between family members, a foreclosure, a short sale or an investor bulk purchase was priced by something other than the open market, and using one drags the whole set.
The adjustment is made to the comparable, not the subject
This is the step people reverse. You are asking what each comparable would have sold for if it had been the subject property, so every adjustment is applied to the comparable's sale price. A comp with an extra bathroom the subject does not have gets that value subtracted from its price. A comp with no garage where the subject has a two-car garage gets value added to its price.
The adjusted prices then cluster, and the cluster is the answer. A good set brackets the subject, some comparables adjusting upward and some down, because a set that all moves one way means the comparables were systematically better or worse than the house and the conclusion is leaning on the adjustments rather than on the sales.
Adjustment amounts are not a price list. They come from what the local market has paid for that difference, which is why a pool is worth much less in a valley where most homes have one than somewhere it is unusual.
How many is enough
An appraisal typically uses three to six closed sales, with three as a working minimum, and the number is a floor rather than a target. What matters more is the spread: three sales that needed almost no adjustment are worth more than eight that each needed several.
The count is also a confidence signal, and it should be read as one. A read off three sales deserves less trust than one off thirty. That is why an unusual house is hard to value from comps at all: the only two-story on a street of single-story homes, or the acre lot in a subdivision of quarter-acres, is being measured against worse matches than a typical house is, and the number carries a wider range around it whether or not anybody says so.
Three uses of the same sales
An agent's comparative market analysis is a pricing exercise: what should this house be listed at to sell in a given time. It weighs the active competition and the pending sales alongside the closed ones, and it is an opinion by a licensee rather than an appraisal.
An appraisal is a licensed opinion of market value on a stated date, prepared for a lender, on a form, with every adjustment written down and defensible. It reads actives and pendings only as evidence of the market's direction.
An automated estimate is a model reading public and listing records at scale. It cannot see inside a house, tell a renovated kitchen from an original one, or know that a comparable it leaned on was a distressed sale.
What Kouzr's own price read does
Our read is deliberately narrow and it says what it is. It compares a listing's asking price per square foot to nearby homes of similar age, and it reports how many comparables sit behind the number, because a figure drawn from three sales deserves less trust than one drawn from thirty.
It is a screen, not a valuation. It is useful for sorting a list of listings quickly and for noticing that something is priced oddly for its street, and it does not replace an agent's analysis or an appraisal, neither of which we perform.
Questions people ask
How do you find comps for free?
Closed sale prices are public record in most states and the county recorder or assessor is the source, though the data lags the sale by weeks. Portals show recent sold prices, and a licensee can pull the multiple listing service history, which carries the photographs and the condition notes the public record does not.
How recent do comps need to be?
Three to six months is the usual window, and it tightens when prices are moving fast. Older sales are still usable with a market conditions adjustment, but each month of age adds an assumption, so a set built from last year's closings is a weaker read than one built from last quarter's.