How to Run Comps in Real Estate

Your offer price, your ARV, and your buyer's confidence all rest on the same foundation: the quality of your comparable sales analysis. A tight set of well-chosen comps produces a reliable valuation. A loose set of poorly matched comps produces a number that feels right until it gets challenged — by your buyer, your lender, or the appraiser at the refinance stage.

This post covers how to run comps correctly for fix and flip and wholesale deals — not how to get a ballpark, but how to build a defensible valuation you can stand behind.

What a comp is — and what it isn't

A comp (comparable sale) is a recently sold property that is similar enough to your subject property that its sale price is a meaningful data point for estimating value. The key word is sold. Not listed. Not pending. Not under contract. Sold — a transaction that closed, with a price recorded in the public record.

Zillow's Zestimate is not a comp. A neighbor's opinion of what the house is worth is not a comp. An active listing at $320,000 tells you what a seller hopes to get — it tells you nothing about what the market will actually pay.

Only closed sales tell you that. This distinction matters because many investors — especially newer wholesalers — build their ARV on active listings and then discover their buyers won't support the number. Buyers run their own comp analysis. If yours doesn't match, the deal falls apart or the price drops. Run the comps right from the start.

What makes a good comp

A good comp is similar to your subject property in four dimensions: location, size, condition, and property type. The closer the match on all four, the more reliable the valuation. If you have to compromise, prioritize location and condition over exact square footage — those two factors drive value more consistently than size alone.

Location. Start within 0.25 miles of the subject property as a starting point in typical suburban markets. Expand to 0.5 miles if needed, then up to 1 mile in rural or lower-density areas. Same neighborhood or subdivision is always preferable to same zip code. A comp three streets over in the same subdivision is stronger than one a half mile away across a major road.

Size. Stay within approximately ±20% of your subject's gross living area. On a 1,500 sq ft house that's a range of 1,200–1,800 sq ft. On a 2,500 sq ft house it's 2,000–3,000 sq ft. The percentage approach scales correctly across property sizes — a flat 200 sq ft rule is too tight on a large home and too loose on a small one. Some appraisers run their initial search at ±25% to avoid missing borderline matches, then select the closest comps from that pool.

Beds and baths. Same bedroom and bathroom count is ideal. One bedroom difference is workable with an adjustment. Two bedrooms is too much — the properties are serving different buyer pools.

Property type. Single-family to single-family. A condo is not a comp for a detached home. A townhouse is not a comp for a SFR. Keep property types consistent.

Condition. This is the most subjective dimension and the most important for fix and flip. Your ARV is the value after renovation — so your comps should reflect renovated or updated properties, not distressed ones. A comp that sold for $180,000 because it needed $60,000 in work tells you nothing useful about what your fully renovated property will sell for. Filter for condition.

Recency. Use sales from the last 6 months. In fast-moving or volatile markets, tighten to 3 months. In slow or rural markets where recent sales are thin, you may need to extend to 12 months — but note that older comps carry more uncertainty and should be weighted less.

How many comps you need

Three to five solid comps is the target for a reliable ARV comps analysis. Three highly comparable sales that cluster within a tight price range is a stronger valuation than six loosely matched sales spread across a wide range. Quality of the match matters more than quantity.

When your comps cluster tightly — say, $265,000, $272,000, and $275,000 — you have a reliable range and your ARV sits in the middle of it. When your comps are spread wide — $240,000 to $310,000 — something is off. Either the comps aren't well-matched, or the market is genuinely variable and you need to understand why before you commit to a number.

If you can't find 3 solid comps within half a mile in the last 6 months, expand the radius before you expand the date range. Proximity is often a stronger determinant of value than recency in most markets — but in fast-moving markets that relationship can reverse.

What disqualifies a comp

Not every recent sale in the area is a valid comp for your real estate comp analysis. Exclude:

• Distressed sales — foreclosure auctions, REO sales, short sales, and estate sales often close below market value. They tell you what a motivated or forced seller accepted, not what the market will pay for a clean retail transaction.
• Non-arm's-length transactions — sales between family members, related entities, or known associates are often priced below market and should be excluded.
• New construction — builder sales carry different costs, warranties, and buyer expectations. Don't use new construction as a comp for a resale property unless the market is dominated by it.
• Outliers — a sale that is 20% above or below the rest of the comp set is either a unicorn or a data error. Investigate before including it.

Price per square foot — the equalizer

When your comps aren't identical to your subject property, price per square foot (PPSF) is the most useful tool for making adjustments. Calculate PPSF for each comp (sale price ÷ gross living area), find the range, and apply it to your subject property's square footage as a cross-check on your ARV estimate — assuming similar condition and layout.

If your comps sell at $140–$155 per square foot and your subject property is 1,800 sq ft, your ARV range is approximately $252,000–$279,000. Where in that range you land depends on how the subject's condition, location, and features compare to the comps.

PPSF is a cross-check, not a formula. Smaller properties typically sell at higher PPSF than larger ones in the same neighborhood. Use it to validate your estimate, not to replace the comp analysis.

Adjustments — accounting for differences

No comp is identical to your subject property. When a comp differs in a meaningful way — an extra bathroom, a garage your subject doesn't have, a larger lot — you need to adjust for it.

The adjustment direction is straightforward: if the comp has something the subject doesn't, subtract from the comp's price. If the subject has something the comp doesn't, add to the comp's price. The adjusted values across your comp set should cluster in a tighter range than the unadjusted values.

Adjustment amounts vary by market. In some markets an extra full bathroom adds $8,000–$12,000 in value. In others it adds $3,000–$5,000. Use local data — what buyers have actually paid for that feature in that neighborhood — not national averages.

Keep your adjustments honest. The purpose of adjusting is to make the comp more comparable, not to push the ARV toward the number you want. If you find yourself making large adjustments to justify a high ARV, the comp probably isn't a good match and you should find a better one.

Functional obsolescence — what the numbers don't show

Comps tell you what similar properties sold for. They don't always tell you why a property might sell for less than those comps suggest. Before you finalize your ARV, check for functional obsolescence — characteristics that reduce appeal or value in ways that don't show up in the sale price data.

Open Google Maps and spend a few minutes on it before you commit to a number. Look for railroad tracks, high-voltage power lines, industrial neighbors, landfills, flood zone indicators, and school district boundaries. A property that comps at $280,000 based on nearby sales may only sell for $240,000 if it backs up to a freight line — and your comps may not reflect that if none of them have the same issue.

This is especially important for virtual wholesalers and remote investors who can't walk the neighborhood. The numbers can look right and the deal can still be wrong. Check the map.

Where to find comps

The best source for comps is the MLS — it has the most complete, accurate, and current closed sale data available. If you have MLS access through a real estate license or a relationship with an agent, use it.

If you don't have MLS access, there are several tools that aggregate comp data from public records and MLS feeds:

• RE Data Metrix ARV Helper — built into the Deal Analysis tool. Pulls sold comps from Zillow and Redfin data, applies composite scoring by distance, price per sq ft, beds, baths, and square footage, and auto-expands the search radius if the initial pull is thin. Pre-selects the 3 strongest comps but lets you review and select others. Try it free here.
• PropStream — comprehensive property data platform with nationwide MLS comp data, 50+ filters, ownership history, and pre-foreclosure lists. Strong for markets where public record data is robust.
• DealMachine — driving for dollars app with built-in comp data and skip tracing. Good for mobile-first investors and wholesalers working local markets.
• BatchLeads — skip tracing and list building platform that includes comp data. Popular with wholesalers running direct mail and cold outreach campaigns.
• DealCheck — investment property analysis tool with comp data and ARV estimates. Covers flips, BRRRR, and rentals. If you also want integrated loan and refinance analysis alongside your ARV, RE Data Metrix Deal Analysis handles both in a single workflow.
• Rehab Valuator — deal analysis and rehab estimating tool with comp data and professional PDF reports.

For a full directory of comp and market data tools, see redatametrix.com/tools/comps.

How comps connect to your deal analysis

ARV is the starting point for every downstream calculation in a fix and flip or BRRRR deal. Once you have a reliable ARV, you can calculate your maximum purchase price, model your financing costs, and project your return. The BRRRR Method Part 2 walks through how ARV feeds into the full deal math — including refinance LTV, total cost stack, and capital recovery. If you're building a comp analysis for a flip rather than a rental, the same principles apply but the exit is a sale rather than a refinance — and the ARV needs to hold up to a buyer's agent's comp analysis, not just a lender's appraiser.

Understanding how to comp a property accurately is one of the most valuable skills in real estate investing. A number of common BRRRR mistakes traced back to in Part 5 of the BRRRR series stem directly from optimistic ARV — cascading through every downstream number. The same is true on flips and wholesale deals. Get the comps right and every other decision gets easier.

Common mistakes

Using list prices instead of sold prices. A listed property tells you what a seller wants. A closed sale tells you what the market paid. Only use closed sales.

Using comps that are too old. A sale from 14 months ago in a market that has shifted 8% is not a reliable data point. Recency matters.

Ignoring condition differences. Running comps against fully renovated sales when your subject needs $50,000 in work — or against distressed sales when your subject will be turnkey — produces a meaningless number. Match condition.

Stretching the radius too far. A comp a mile and a half away across a highway and a school district line is not a comparable sale. Proximity is a proxy for the same buyer pool, the same neighborhood amenities, the same market dynamics.

Cherry-picking. Selecting only the highest comps to justify the price you want is how investors get into trouble with buyers and appraisers. Your comp set should represent the market, not your desired outcome.

Skipping the map check. Functional obsolescence doesn't show up in the sold price data. Check the surroundings before you finalize your ARV.

Frequently asked questions

What is a comp in real estate?

A comp (comparable sale) is a recently sold property that is similar to the property you are evaluating in location, size, condition, and property type. Comps are used to estimate a property's market value — specifically the after-repair value (ARV) for fix and flip and wholesale deals. Only closed sales count as comps — active listings and pending sales are not reliable data points because they haven't been confirmed by a completed transaction.

How far back should comps go?

Use sales from the last 6 months as a starting point. In fast-moving markets, tighten to 3 months. In slow or rural markets with limited sales volume, you may need to extend to 12 months — but weight older comps less heavily. A sale from 18 months ago in a changing market is rarely a reliable data point.

How many comps do I need for an ARV?

Three to five solid comps is the target. Three highly comparable sales that cluster in a tight price range is a stronger valuation than six loosely matched sales spread across a wide range. Quality of the match matters more than quantity. If you can't find 3 solid comps within half a mile in the last 6 months, expand the search radius before expanding the date range.

What is price per square foot and how do I use it for comps?

Price per square foot (PPSF) is calculated by dividing a property's sale price by its gross living area. It's a useful cross-check on your ARV estimate — assuming similar condition and layout. If your comps sell at $140–$155 per square foot and your subject is 1,800 sq ft, your ARV range is approximately $252,000–$279,000. Use PPSF to validate your estimate, not to replace the comp analysis. Smaller properties typically sell at higher PPSF than larger ones in the same neighborhood, so don't apply it mechanically across properties with significantly different sizes.

What should I do if I can't find enough comps?

First expand the search radius — try 1 mile, then 2 miles — before expanding the date range. If the market genuinely lacks comparable sales (rural areas, non-disclosure states, or highly unique properties), consider using PropStream or a similar platform that aggregates data from multiple sources, consulting a local real estate agent with MLS access, or being more conservative with your ARV to account for the uncertainty. In non-disclosure states where sale prices aren't publicly recorded, tools like PropStream that pull from MLS feeds rather than public records are especially valuable.