Comparable sales, often called “comps,” are the foundation of most real estate appraisals.
When an appraisal comes in lower than expected, people often blame the comps. They assume the appraiser picked bad sales or ignored better ones.
Sometimes that is true.
Other times, the issue is not obvious.
Understanding how appraisers choose comparable sales helps you know when an appraisal makes sense and when it may deserve a closer look.
What Are Comparable Sales?
Comparable sales are recent property sales used to help estimate the market value of a subject property.
Appraisers use comps to answer one basic question:
What have similar homes sold for in this market?
The closer a comp is to the subject property, the more weight it carries.
Why Comparable Sales Matter So Much
In most residential appraisals, comparable sales:
- Drive the value conclusion
- Influence adjustments
- Shape the lender’s decision
If the comps are weak, outdated, or poorly matched, the final value can suffer.
How Appraisers Select Comparable Sales
Appraisers do not choose comps randomly. They follow general guidelines, lender rules, and professional judgment.
While exact methods vary, most appraisers consider the same core factors.
1. Location Comes First
Location is usually the most important factor.
Appraisers typically prefer comps that are:
- In the same neighborhood
- In the same subdivision or school district
- In a similar market area
Sales farther away may be used when closer options are limited, but distance matters.
2. Sale Date Matters
Recent sales usually carry more weight.
In most cases, appraisers look for sales that:
- Closed within the past 3 to 6 months
- Reflect current market conditions
Older sales may be used when activity is limited, but they may require more explanation.
3. Property Size and Layout
Appraisers aim to select homes that are similar in:
- Square footage
- Bedroom and bathroom count
- Overall layout
Large size differences often require adjustments, which can introduce uncertainty.
4. Condition and Quality
Two homes with the same size can sell for very different prices based on condition.
Appraisers consider:
- Overall upkeep
- Renovations and updates
- Age of major systems
- Construction quality
Using comps in very different condition can affect value conclusions.
5. Lot Size and Features
Other factors appraisers consider include:
- Lot size
- Views
- Garages or outbuildings
- Basements or finished space
Not all features carry the same weight in every market.
Why Appraisers Sometimes Use “Weaker” Comps
People often ask why an appraiser did not use a sale they believe was better.
Common reasons include:
- The sale was not closed yet at the time of appraisal
- The sale was outside the defined market area
- The sale was too dissimilar
- The sale required unsupported adjustments
A comp that looks better on the surface may not meet appraisal guidelines.
Can Appraisers Ignore Higher Sales?
Appraisers are not allowed to ignore data intentionally, but they must use sales that best represent the market.
If higher sales exist but differ significantly from the subject property, they may not be appropriate comps.
That said, sometimes better comps are missed.
Knowing the difference matters.
When Comparable Selection Becomes a Problem
Comparable selection may be an issue when:
- Sales are much older than necessary
- Sales are far outside the area
- Sales differ greatly in size or condition
- Better, more similar sales were available
- Adjustments do not reflect market behavior
These are situations where closer review may be warranted.
Why Most People Misunderstand Comparable Sales
Most homeowners:
- Do not know what qualifies as a comp
- Focus only on price, not similarity
- Rely on online estimates or listings
- Assume newer or higher sales are always better
Comparable selection is more nuanced than most people realize.
What This Means If Your Appraisal Came in Low
A low appraisal does not automatically mean the comps were wrong.
But it does mean the comps deserve a careful review.
The key questions are:
- Were better comps available at the time?
- Are the comps truly similar?
- Are the adjustments reasonable?
- Is important information missing?
These questions require structure and clarity to answer.
A Smarter Way to Review Comparable Sales
Reviewing comps is not about picking higher prices.
It is about:
- Understanding similarity
- Identifying meaningful differences
- Evaluating adjustments
- Knowing when comps support or weaken value
Most people guess. Professionals follow a process.
Want to Know How to Review Comps the Right Way?
If you want to know:
- How appraisers actually evaluate comparable sales
- What makes one comp stronger than another
- When comp selection may be challenged
- What mistakes to avoid when reviewing comps
- How to raise comp concerns properly
The How to Fight a Low Appraisal AppraisalKey Toolkit explains how to review comps step by step, without guesswork.
Comparable sales are the backbone of an appraisal, but they are not always obvious or simple.
Knowing how appraisers choose comparable sales helps you understand appraisal outcomes and recognize when a closer look may be justified.