In one line: Recently sold homes similar enough to price yours against.
Comps are recent sales of homes similar to the one being priced: close by, similar size, similar age and condition. Every serious price opinion, from an agent's listing price to a lender's appraisal, is comps arithmetic with judgment on top.
The judgment is in the adjustments. A comp with a pool, an extra bath, or a remodeled kitchen is not the same home, and each difference moves the number. The fewer adjustments a comp needs, the more it is worth listening to.
Kouzr's discount figure compares a listing's asking price per square foot to nearby homes of similar age, and says how many comparables sit behind the number, because a read off three sales deserves less trust than one off thirty.
A worked example
Three homes on the same street, built within five years of each other and within 200 square feet, closed at $455,000, $462,000 and $470,000 in the last four months. A fourth at $520,000 has a pool and a casita, so it is a comp only after $50,000 of adjustments.
Questions people ask
How recent and how close should a comp be?
Within six months and within a mile is the usual appraisal rule, tighter in a dense subdivision and looser in the rural edges of the valley. In a moving market, recent beats close.
Can I use active listings as comps?
Only to see what you are competing against. An asking price is an opinion; a closed sale is a fact. Kouzr's discount figure uses nearby homes' pricing per square foot and says how many sit behind it for that reason.