Real Estate Comps: How to Run Comps Like a Pro

Overestimating ARV by just 10% can turn a profitable flip into a loss. For wholesalers, bad comps mean your buyer can't make the numbers work. The deal dies. Your reputation takes a hit.

Running comps accurately is the single most important analytical skill in real estate investing. Every offer you make, every assignment fee you calculate, and every deal you evaluate starts with comps.

Let's break down how to do it right.

What Are Real Estate Comps?

Real estate comps (short for comparables) are recently sold properties that are similar to your subject property in location, size, condition, and features. You use them to estimate what a property is worth right now or what it will be worth after renovations.

Why Comps Matter for Investors

Every investment decision comes back to comps:

• Wholesalers use comps to calculate ARV (after repair value) and determine their maximum offer price using the 70% rule
• Flippers use comps to estimate profit margins and set their resale price
• Buy-and-hold investors use comps to make sure they're not overpaying
• Your cash buyers will run their own comps on every deal you send them. If your numbers don't match theirs, you lose credibility.

Accurate comps should land within 5-10% of the eventual appraised value. If you're consistently off by more than that, you're either using bad data or bad methodology.

Comps vs. Appraisals vs. BPOs

Running comps is something you can do yourself for free. An appraisal costs $300 to $600 and is done by a licensed professional. A broker price opinion (BPO) falls somewhere in between.

For wholesaling and deal analysis, you're running your own comps. Save the appraisals for when a lender requires one.

Where to Find Comparable Sales Data

MLS Access

The MLS (Multiple Listing Service) is the gold standard for comp data. It has the most accurate, most detailed information on recent sales, including days on market, price reductions, and seller concessions.

The catch? You need an agent's help to access MLS data. Some investors get their own license for this reason. Others build relationships with investor-friendly agents who pull comps for them.

PropStream, Zillow, Redfin, and Realtor.com

For investors, PropStream is the go-to tool. It provides access to over 155 million property records with built-in comp analysis, ARV estimates, and rehab calculators. Plans start at $165/month.

Free tools like Zillow and Redfin work as starting points:

Those numbers look good for on-market homes. But for off-market properties (which is most of what investors deal with), the error rate jumps to 7%+. On a $200,000 property, a 7% error means you could be off by $14,000. That's enough to kill a deal.

Free tools are useful for quick sanity checks. For actual investment decisions, use investor-grade data.

County Assessor and Recorder Websites

County assessor sites give you tax assessments, ownership records, and sometimes basic sale history. They're free but limited. The data may be 6-12 months behind current market conditions.

County recorder offices have deed records showing actual sale prices. This is raw data without adjustments, but it's reliable.

Paid vs. Free Data Sources

For our full comparison of property data platforms, check out PropStream vs PropertyRadar.

How to Select Valid Comps

This is where most people make mistakes. Using the wrong comps gives you the wrong value. Here are the rules.

The 1-Mile Radius and 6-Month Rule

Search for sold properties within 1 mile of your subject property that sold within the last 6 months. Ideally, you want comps within 0.5 miles that sold within 90 days.

Why? Property values change over time and vary block by block. A comp from 3 miles away or 12 months ago may not reflect your property's current market.

If you can't find enough comps within those parameters, gradually expand. Go to 1.5 miles or 9 months. But note that wider searches are less reliable.

Matching Property Type, Size, and Condition

Compare apples to apples:

• Property type. Single-family to single-family. Don't compare a ranch to a townhouse or a condo.
• Square footage. Within 10-20% of your subject property. A 1,200 sq ft house is not comparable to a 2,400 sq ft house.
• Bedroom/bathroom count. Same count is ideal. One bedroom difference is acceptable with adjustments.
• Year built. Within 5-10 years of your subject property. A 1960s ranch doesn't compare well to a 2015 new build.
• Lot size. Similar lot sizes, especially in areas where land value is a big factor.
• Condition. This is the one investors mess up most. Don't compare a renovated home to a fixer-upper without making adjustments.

Minimum of 3-5 Comps

Use at least 3 comps, ideally 5 or more. One comp tells you nothing. Two comps give you a range. Three or more start to paint a reliable picture.

If you're having trouble finding 3 good comps, your market might be too thin for reliable valuation. Proceed carefully or consult an agent with local expertise.

How to Run Comps Step by Step

Step 1: Define the Subject Property

Write down everything about the property you're analyzing:

• Address and neighborhood
• Square footage
• Bedroom and bathroom count
• Year built
• Lot size
• Current condition (scale of 1-10)
• Planned renovations (if calculating ARV)

Step 2: Search for Recent Sold Properties

Using PropStream, Zillow, or MLS access, search for:

• Sold properties within 0.5-1 mile
• Sold within the last 90 days (expand to 6 months if needed)
• Same property type (SFR, duplex, etc.)
• Similar square footage (within 10-20%)
• Similar bedroom/bathroom count

Step 3: Filter and Narrow to the Best Comps

You'll probably get 10-20 results. Narrow it down to the best 3-5 by:

• Eliminating properties in different neighborhoods or subdivisions
• Removing outliers (unusually high or low sale prices)
• Prioritizing comps closest in proximity and most recent in time
• Choosing properties most similar in size and condition

Step 4: Make Adjustments for Differences

No two properties are identical. You need to adjust for differences between each comp and your subject property. More on this in the next section.

Step 5: Calculate the Estimated Value

Average the adjusted sale prices of your best comps. That's your estimated market value (or ARV if you used renovated comps).

Example:

Your estimated value is approximately $191,000.

Making Adjustments Like an Appraiser

Adjustments are where the art meets the science. You're adding or subtracting value based on differences between each comp and your subject property.

Price Per Square Foot Adjustments

Calculate the price per square foot for each comp. If your subject property is smaller than a comp, subtract value. If it's larger, add value.

Adjustments are typically $50 to $150 per square foot depending on the market. In a $200/sqft market, a comp that's 200 sqft larger than your subject needs a $40,000 downward adjustment. That's significant.

Bedroom and Bathroom Adjustments

These ranges are market-dependent. An extra bedroom in a high-cost market might be worth $15,000. In a low-cost market, $5,000.

Condition and Renovation Adjustments

If a comp sold in renovated condition and your subject is a fixer-upper, you need to adjust for the difference. This is especially important when calculating current market value (not ARV).

Estimate the cost to bring your subject to the comp's condition level and subtract that amount.

Garage, Pool, and Lot Size Adjustments

• Garage. A 2-car garage adds $10,000-$25,000 depending on market.
• Pool. Adds $10,000-$30,000 in warm climates. Less or even negative in cold climates.
• Lot size. Adjust at a per-acre or per-square-foot rate for your area.

How to Handle Outliers

If one comp sold for 30% above or below the others, it's an outlier. There's usually a reason. Foreclosure, estate sale, family transaction, or some other non-arm's-length factor.

Remove outliers from your analysis. They skew your numbers and lead to bad decisions.

Calculating ARV for Wholesale and Flip Deals

Using Comps to Determine After Repair Value

ARV is what the property will be worth after renovations. To calculate it, you need comps that are:

• Fully renovated (matching the level of renovation you're planning)
• Recently sold (within 90 days ideally)
• In the same neighborhood
• Similar in size and layout

You're comparing your property's future state to what similar renovated properties have actually sold for. That's your ARV.

The 70% Rule and How It Ties to Comps

The 70% rule gives you your maximum offer:

Maximum Offer = (ARV x 0.70) - Repair Costs

For a property with an ARV of $250,000 and $40,000 in needed repairs:

Maximum Offer = ($250,000 x 0.70) - $40,000 = $135,000

That's the most you'd pay. Your assignment fee comes out of the difference between your contract price and what the cash buyer pays.

If your comps are wrong, your ARV is wrong. If your ARV is wrong, your max offer is wrong. And if your max offer is wrong, either you overpay (bad for you) or your buyer can't make the numbers work (deal falls apart).

Building in Your Profit Margin

When you're wholesaling, your assignment fee needs to fit between your contract price and what a buyer is willing to pay. That means your ARV needs to leave room for:

• The buyer's renovation costs
• The buyer's holding costs (carrying the property during rehab)
• The buyer's profit
• Your assignment fee

Be conservative. Your cash buyers will run their own comps. If your numbers are inflated, they'll walk. Run your comps the way they run theirs and you'll build trust that leads to repeat business.

For more on structuring your assignment fee, read our assignment of contract guide.

Common Comp Analysis Mistakes

Using Comps Too Far Away or Too Old

A comp from 3 miles away is in a different market. A comp from 12 months ago is in a different market condition. Stick to 1 mile and 6 months as your boundaries. Tighter is better.

Comparing Different Property Types

A single-family ranch is not comparable to a townhouse. A duplex is not comparable to a single-family home. Even within single-family homes, a 1950s cape cod doesn't compare well to a 2010 craftsman. Match the type as closely as possible.

Ignoring Market Trends

In an appreciating market, comps from 6 months ago undervalue your property. In a declining market, they overvalue it. Pay attention to the direction. If prices in your area have gone up 5% in the last 6 months, adjust accordingly.

Relying on a Single Comp

One comp is not enough data. It could be an outlier. It could have been a distressed sale. It could have had unique features that don't apply to your property. Always use at least 3, preferably 5.

Not Verifying Sold Price vs. List Price

The listing price is not the sale price. Always use actual sold prices from closed transactions. Pending sales and active listings tell you what sellers are asking, not what buyers are paying.

Tools for Running Comps

PropStream (Investor-Focused Comp Tool)

PropStream is built for investors. You get comp analysis, ARV estimates, rehab calculators, and property data all in one platform. It pulls from 155+ million property records nationwide.

For wholesalers who also use it for motivated seller lists and skip tracing, it's a no-brainer. Plans start at $165/month.

Free Alternatives and When They're Enough

Zillow and Redfin are fine for:

• Quick sanity checks on a property value
• Getting a general sense of a neighborhood's price range
• Initial screening of potential deals

They're not enough for:

• Making offers on investment properties
• Calculating ARV for wholesale deals
• Presenting deals to cash buyers with confidence

The 7%+ error rate on off-market properties is too high for investment decisions. Use free tools to screen, then use investor-grade tools to analyze.

Mobile Apps for Analyzing Deals on the Go

When you're driving for dollars and spot a potential deal, you need to run comps on the spot. PropStream has a mobile app that lets you pull comps, check ownership, and estimate values from your phone.

DealMachine and other driving-for-dollars apps also include basic property data. But for serious comp analysis, PropStream is the move.

FAQ

What are real estate comps?

Comps are recently sold properties similar to your subject property. You use them to estimate market value or ARV. The key criteria are location (within 1 mile), recency (within 6 months), and similarity (same type, size, and condition).

How do you find comps for a property?

Search for recent sales within 1 mile using PropStream, MLS access, Zillow, or county records. Match property type, size, bedroom/bathroom count, and condition. Start tight (0.5 miles, 90 days) and expand if needed.

How many comps do you need?

Minimum 3, ideally 5 or more. One or two comps can mislead you. Three or more give you a reliable range and help you identify outliers.

What is the difference between comps and an appraisal?

You run comps informally using available data. An appraisal is a formal valuation by a licensed appraiser, typically required by lenders. Both use comparable sales, but appraisals follow stricter standards and cost $300 to $600.

How do you adjust comps for differences?

Add or subtract value for each difference. Extra bedroom? Subtract $5,000 to $15,000. Extra square footage? Adjust at $50 to $150 per square foot. The goal is to normalize each comp to match your subject property.

What is ARV and how is it calculated?

ARV (After Repair Value) is the estimated value after renovations. Calculate it by finding comps that match your property's post-renovation state. Average the adjusted sale prices of your best 3 to 5 renovated comps. That's your ARV.

Put Your Comp Skills to Work

Running comps accurately is what separates profitable investors from the ones who lose money on bad deals. Master this skill and every deal you touch gets better. Your offers are tighter. Your buyers trust your numbers. And you avoid the deals that look good on paper but fall apart at closing.

Ready to find deals to analyze? Start your direct mail campaign with REmail and generate a pipeline of motivated seller leads. Then put your comp skills to work making offers that lead to profitable assignments.

For the complete wholesaling process, check out how to wholesale real estate.

That's all I got. Till next time.