Real estate comparables
Simply put, real estate comparables – or “comps” – are comparable properties in a specific area that you're looking to buy or sell in. Comps are used to determine the value of a home by comparing it to similar properties sold in the same neighborhood or in an area as close as possible to the house being valued.
What does comp mean in selling?
Comparable company analysis
In retail, it refers to a company's same-store sales compared to the previous year or a similar store. Similarly, in financial analysis, comps is short for "comparable company analysis," which is a technique used to assign a value to a business based on the valuation metrics of a peer.
Do comps matter in commercial real estate?
Commercial real estate comps are primarily used for one of two reasons: 1) To assess the value of a single property. 2) To find duplicates of a favorable investment/business opportunity. Appraisers, property buyers, and property sellers are among those who might turn to real estate comparables on a regular basis.
Why do realtors use comps?
The listing agent uses comps to help sellers set an asking price, while the buyer's agent helps home buyers determine the amount they should offer on a house. Real estate agents can use the sales comparison approach as the foundation of a comparative market analysis to estimate the value of a property.
What is a comp in business?
Comparable store sales refers to the revenue generated by a retail location in the most recent accounting period relative to the revenue it generated in a similar period in the past. Comparable store sales, or "comps," are also referred to as "same-store sales" or "identical-store sales."
What are commercial transactions in real estate?
A commercial real estate transaction involves a contract deal between two legal entities, rather than two people like in residential transactions.