Good Comps: The Art, The Science, and the Occasional Psychic Reading
If you’ve ever tried to buy or sell a business, a house, or even a vintage Chevelle SS, you know there’s one phrase that can trigger heated debates, rolled eyes, and the occasional unprintable comment: “What are the comps?”
Ah yes, comps.
The magical word that’s supposed to mean “objective evidence of value”… except it’s often code for “whatever number makes my case sound better.”
Here’s the thing: Defining good comps is a work of art. Understanding them is a work of science. And sometimes, it’s also a little bit of detective work with a dash of stand-up comedy.
The Art of Defining Good Comps
Picking comps is like picking a playlist for a wedding. Sure, you could just play the Spotify “Top 40” and call it a day, but if you want the crowd to stay on the dance floor (or the buyer to stay in the negotiation), you’ve got to curate.
The “art” comes from knowing:
What’s Relevant vs. What’s Convenient
That $2M beachfront bungalow in Malibu might be “similar” to your inland condo if you stretch your imagination, ignore geography, and maybe have heatstroke. Real comps require relevance in location, size, condition, and timing.What’s Real vs. What’s a Unicorn
That one-off, way-over-market sale? Tempting to include. But if it’s not repeatable in the real world, it’s an outlier. Treat it like your cousin’s story about catching a 200-pound fish—fun to hear, but it’s not going in the official record.The Story Behind the Sale
Was it a divorce fire sale? A corporate relocation? A late-night “fine, just sign it” deal? Context matters. Numbers without backstory are like wine without a label—you don’t know if it’s vintage or vinegar.
The Science of Understanding Comps
Once you’ve painted your masterpiece of relevant, reasonable comps, it’s time for the science part.
Here’s where you trade your artist’s beret for a lab coat:
Time-Adjust the Numbers
Market conditions can change faster than gas prices on a holiday weekend. A comp from six months ago might need an adjustment up or down, depending on the market’s direction.Quantify the Differences
Bigger lot? Smaller building? Newly remodeled kitchen versus one that looks like it’s auditioning for a 1970s sitcom? Assign a realistic dollar value to these differences—not just a guess you pull from thin air.Statistical Reality Check
If one comp is way higher or lower than the others, don’t just shrug. Figure out why. Sometimes outliers reveal a hidden factor you missed… and sometimes they’re just noise that needs to be ignored.
Best Methods for Determining Comps
Whether you’re in real estate, M&A, or vintage car flipping, here’s the playbook:
Use Multiple Sources: MLS, CoStar, BizBuySell, auction records, public filings—cross-reference like your credibility depends on it (because it does).
Limit Your Radius: In real estate, that means neighborhood. In business sales, it means industry and market niche.
Match the Timeline: Comps older than 6–12 months start to lose relevance unless the market is extremely stable (spoiler: it rarely is).
Adjust Objectively: Use consistent, transparent adjustments for size, condition, or performance differences.
Throw Out the Weird Ones: If a comp doesn’t make sense after a second look, it’s not helping you—it’s confusing you.
The Takeaway
Defining comps is an art because you have to know what to include and what to leave on the cutting room floor. Understanding comps is a science because you have to strip away bias, run the numbers, and let reality have the final say.
The danger? Treating comps like a buffet where you only take what you like. The goal? Building a case so airtight that even your toughest critic nods and says, “Yeah… that checks out.”
And if all else fails, you can always consult the ancient and mysterious “Comps Whisperer”—but you might just find they’ve been using the same playbook all along
Why Zillow is the Most Expensive App on Your Phone
Good Comps: The Art, The Science, and the Occasional Psychic Reading
In real estate, you can’t throw a rock without hitting someone talking about comps.
(Although, for legal reasons, we don’t recommend throwing rocks at people holding clipboards.)
Comps—short for “comparable sales”—are supposed to be the holy grail of pricing. The problem? Everyone thinks they know what “good comps” are… and everyone’s definition magically lines up with whatever number benefits them.
Here’s the truth: Defining good comps is an art. Understanding them is a science.
Get one side wrong, and you’re either leaving money on the table or pricing your property so high it collects dust instead of offers.
The Art of Defining Good Comps
Real estate comps are like online dating profiles—what you choose to show (or not show) makes all the difference.
The art comes down to knowing what actually counts as comparable:
Location, Location, Reality
Same ZIP code ≠ same market. That condo next to the park with a coffee shop on the corner is a different animal than the one across from a tire factory.Condition Counts
“Updated” in one listing might mean new quartz countertops. In another, it means the homeowner finally changed the lightbulbs.Eliminate the Unicorns
That record-breaking sale down the street? Sure, it’s technically a comp… if your buyer also happens to be a celebrity looking for a tax write-off.The Story Behind the Sale
Was it a bidding war? A divorce settlement? A cash buyer who didn’t blink? Those circumstances matter, and they can make a “comp” more like a “one-off miracle.”
The Science of Understanding Comps
Once you’ve hand-picked your beautiful gallery of comps, you’ve got to put on your lab coat and start crunching numbers.
Time-Adjust for the Market
A sale from nine months ago in a hot market? Bump it up. A year-old sale in a cooling market? Pull it down.Adjust for the Details
Square footage, lot size, garage spaces, upgrades—all of it has a dollar value. Not a feeling value. A measurable one.Run the Stats, Not Your Emotions
If one comp is way higher or lower than the rest, find out why. Don’t just average it in and hope for the best.
Best Practices for Nailing Real Estate Comps
Stay Local: Ideally, within a quarter-mile in dense areas, or same school district in suburban markets.
Keep It Fresh: Look for sales within the last 3–6 months (shorter in fast-changing markets).
Match Property Type: Don’t compare a ranch to a split-level or a condo to a single-family home.
Mirror the Condition: Renovated properties compare with renovated properties, fixer-uppers with fixer-uppers.
Throw Out the Weird Ones: Anything that sold under strange circumstances (estate sale, foreclosure, sweetheart deal) should be treated as a curiosity, not gospel.
The Takeaway
Good comps in real estate aren’t about finding any sale you can use—they’re about finding the right sales. The art is in knowing what to include. The science is in stripping away the hype, doing the math, and coming to a price the market will actually support.
And remember:
If your comps are too perfect, they’re probably not comps—they’re marketing.
Your “Zestimate” isn’t just wrong. It’s dangerous.
Here’s what that free Zillow number really costs you:
You open the app. You see $800,000.
Your eyes light up. That’s YOUR number now.
You tell your spouse, your parents, your friends.
You start planning vacations and upgrades in your head.
You need that number.
But here’s the thing: the market doesn’t care about your Zillow screen.
The market sees:
Your neighbor’s house that actually sold for $720k.
The three nearly identical homes still sitting unsold at $730k.
The buyer pool that shrinks dramatically above $725k.
The appraisal comps that keep coming back at $715k.
You still list at $800k.
Because Zillow said so.
The slow-motion disaster begins:
Week 1: “We’re just testing the market.”
Week 4: Showings are crickets.
Week 8: Price cut to $775k.
Week 12: Another reduction to $749k.
Week 16: You cave and accept $710k from an opportunistic buyer.
Here’s the math Zillow won’t show you:
Lost carrying costs: $14,000 (4 months of payments, taxes, utilities).
Lost negotiating power: $5,000 (concessions because buyers know you’re stuck).
Lost momentum: Priceless (a stale listing is toxic).
Actual loss from chasing a fantasy number: $30,000+ GONE.
Now imagine if you had priced correctly from day one:
Listed at $720k with real comps.
Multiple offers in the first week.
Bidding war pushes price to $735k.
Closed in 30 days, stress-free.
That’s the difference between listening to an algorithm and trusting a professional.
Because here’s the truth:
Zillow doesn’t care if your home sells.
Zillow makes money from ads, from eyeballs, from your clicks—not your success.
Your agent cares about:
What the appraisal will actually come in at.
How many buyers are really in the market this month.
What price points trigger competition (and which kill it).
The psychology of urgency vs. sitting stale.
That’s the strategy. That’s the expertise. That’s the difference.
So here’s the real breakdown:
What Zillow IS good for:
Dreaming about a beach house in Malibu
Comparing countertops
Stalking your ex’s property upgrades
Killing time at work
What Zillow is NOT good for:
Pricing your largest financial asset
Making six-figure decisions
Replacing decades of market knowledge
Anything involving real money
The “free” Zestimate? It’s not free.
It’s the most expensive app on your phone.