What are "real estate comps" used for?

Real estate comps, or comparable sales, are used primarily to gauge the market value of a similar property. This practice involves analyzing properties that are similar in size, location, features, and condition to the property in question. By reviewing the prices at which these comparable properties have sold, real estate professionals and investors can estimate a fair market value for the property they're assessing. This approach is crucial in helping buyers, sellers, and investors make informed decisions about transactions and pricing in the real estate market. The accuracy of this valuation is central to negotiating sales prices and determining listing prices, ensuring that both buyers and sellers have realistic expectations about property values.