What Are Real Estate Comps and Why Do They Matter?

Real estate comps (short for comparables) are recently sold homes similar to yours — and they’re one of the most important tools for pricing your home accurately in Texas. By looking at what buyers have actually paid for comparable properties nearby, you can estimate your home’s current market value with much more confidence than relying on guesswork or online estimates.

In simple terms, comps are the foundation of pricing strategies in real estate.

They help sellers avoid pricing too high (which can scare away buyers) or too low (which could leave money on the table). This guide will cover:

• What real estate comps are and how they work
• How home sellers, buyers, and investors use comps 
• Why online estimates alone aren’t always reliable

With this info, you’ll be better equipped to price your home competitively and confidently.

What Are Comps in Real Estate?

Real estate comps are recently sold homes that are similar to the property you’re trying to price. These comparable properties help estimate what your home might realistically sell for in today’s market.

To be considered a strong comp, a property should match yours in key areas like:

• Square Footage – Within about 10–20% of your home’s size
• Layout – Similar floor plan (e.g., single-story vs two-story)
• Location – Same neighborhood or within a close radius
• Condition – Comparable level of repairs, upgrades, or wear
• Year Built – Ideally within the same construction era (e.g., both built in the 90s)
• Features and Amenities – Similar elements like garage spaces, pools, updated kitchens, or lot size

For example: If you own a 1,500-square-foot, one-story home built in 2002 with 3 bedrooms, 2 bathrooms, and a modest backyard, the best comps would be other 3/2 one-story homes of a similar size and age, not a 2,200-square-foot two-story house built in 2018.

Timing matters, too. A comp is strongest if the sale closed within the last 3 to 6 months. The older the sale, the more market conditions may have changed, especially in shifting markets like we’ve seen recently.

Quick Reference: How to Identify a Good Real Estate Comp

Comps offer a real-world view of what homes are actually selling for, not just what people hope to get. That’s why they’re more dependable than online estimates, which often rely on broad data and can miss key details like upgrades or needed repairs.

Why Do Real Estate Comps Matter?

Setting the right price is one of the most important parts of selling a home, and understanding comps is crucial. If you price too high, your home might sit on the market — increasing your days on market and raising red flags for buyers. Too low, and you might miss out on money. Comps help you find the right balance by showing what similar homes recently sold for.

They also make negotiations smoother. When buyers and sellers both reference comps, it’s easier to agree on a fair price without a lot of back and forth.

For cash buyers, comps are especially important. They use comps to determine the fair market value of homes quickly and determine what they’re willing to offer, especially when they plan to close fast and cover repairs themselves.

Comps keep the deal grounded in the current market conditions, not guesses.

How Are Comps Used?

Comps aren’t just about checking prices — they’re a tool used to strategically position a property in the current market.

Real estate professionals, buyers, and investors look for recently sold homes with similar criteria to the property in question. That means:

• Homes located in the same neighborhood or school zone
• Similar architecture and layout (like single-story vs multi-level)
• Comparable age, condition, and level of upgrades
• Just sold — ideally sold within the past few months

The idea is to measure your home against similar properties that buyers would realistically consider as alternatives. If a buyer walked into your home and then into a similar one down the street, would they feel like they’re making a fair trade? That’s the level of similarity comps aim to achieve.

For investors, especially cash buyers — comps are often the starting point in the valuation process. They help frame what the property might sell for after repairs, which is critical when calculating a fair cash offer.

While comps are a useful pricing guide, they don’t replace a professional appraisal. Appraisers perform a deeper analysis that includes inspections and more detailed adjustments. Still, comps play a huge role in the real-world decisions buyers and sellers make every day.

The Role of Comps for Investors

Real estate investors use comps as a starting point to evaluate potential deals, but that’s just one part of a much larger equation.

While comps help determine the value of what a property might sell for in its ideal condition, investors also consider:

• Repair costs – What it will cost to bring the property to resale condition (roof, HVAC, cosmetic updates, etc.)
• Timeline to resell – How long it might take to make those repairs, stage the property, and get it back on the market
• Market demand – Is the area seeing strong buyer interest or slower activity?
• Holding and risk costs – Monthly expenses like taxes, insurance, utilities, plus the risk of market shifts or delays

All of these affect what an investor can offer while still making the deal work.

So while recently sold properties set the potential resale value, investors work backward from that number, subtracting expected expenses, time, and risk, to arrive at a fair cash offer that reflects the property’s as-is condition.

👉 Want to see how this process works in real life? Click here to view our full breakdown on how we calculate cash offers.

This helps sellers understand that cash offers aren’t random or lowball — they’re based on data, logic, and local market knowledge. And unlike traditional sales, cash buyers often cover closing costs, skip inspections, and close on the seller’s timeline.

The Problem with Online Estimates

Online tools like Zillow and Redfin can be helpful, but they’re not always accurate. Here’s why:

1. They Rely on Algorithms

Automated tools (called AVMs) pull from public records, not always the full picture. They can’t see if your kitchen was just renovated — or if your roof needs replacing.

     2. They Miss Local Nuance

These tools don’t always account for local trends, neighborhood appeal, or school zones — all of which can affect the fair market value.

That’s why comps (and professional input) still matter, even in the age of instant online valuations.

Conclusion: Why Comps Empower Sellers

Knowing what your home is worth gives you an edge, and comps are one of the best tools to help with that.

They reflect what buyers are actually paying for homes like yours, helping you set a list price that’s competitive and realistic. At TX Cash Home Buyers, we believe comps are key to helping sellers feel confident about their decisions, whether they’re listing or selling off-market.

If you’re curious what your home could sell for — as-is — we’re happy to run a comp-based evaluation and walk you through the numbers.
No pressure. Just clear data to help you weigh your options. Reach out for a free consultation today.

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FAQs: Quick Answers About Comps

What are real estate comps?

Comps are recently sold homes that are similar to yours. They’re used to estimate your home’s value.

Why do comps matter when selling?

They help you set a competitive price, attract serious buyers, and reduce negotiation guesswork.

Do investors use comps?

Yes. Investors use comps to determine fair offer prices — especially when making cash offers. They also factor in repairs and resale timing.

Can I trust online home estimates?

Not fully. They can be a helpful starting point but often miss key local details. Always double-check with comps and local insights.

What makes a good comp?

A similar home nearby that recently sold. Look for comparable size, layout, condition, and sale timing.