What does 'comps' refer to in real estate?

In real estate, "comps" refers to comparable sales. This term is used to identify properties that are similar to the one being assessed or sold in terms of features such as size, condition, location, and amenities. Real estate professionals use comps to determine the market value of a property by analyzing recent sales of similar homes in the same area. This comparative analysis helps buyers and sellers make informed decisions regarding pricing and purchasing strategies.

By evaluating the sale prices of these comparable properties, agents can provide informed recommendations on listing prices or offer amounts. This approach ensures that the valuation reflects current market conditions and helps maintain competitive pricing strategies, making it an essential practice in real estate transactions.