You may have heard a real estate agent say the word “comp” before. Real estate agents use the word “comp” all the time. For example, we say “We don’t have that comp! Look at that comp!” etc…
A comp is a comparative sale that is so similar to your home that it helps inform what the price of your home should be.
For example, a CMA (comparative market analysis) looks at comps that are similar to your home in order to help figure out what your home might be worth. In this case that would be recent sales that are similar to your home.
If you live in a builder neighborhood, it’s easy to look at a comp and justify the price for your home. However, in a neighborhood like Seattle where there are lots of different types of homes, it becomes more difficult. This is where comps become very helpful during the process of trying to price a home. You don’t want to be comparing a 100-year-old craftsman home to a 2019 townhome! You always want to be comparing a home to recent past sales of homes that are similar to it.