The comparable sales approach (also known as “comps” for short) is a real estate appraisal method that utilizes data from the sales of similar properties in order to estimate the market value of a particular property. The sales must be recent and within the same geographic vicinity so that the homes are as similar as possible.
In the comparable sales approach, several similar properties are used in the analysis. Real estate agents and appraisers often use this approach when evaluating properties to sell. Local governments may also utilize this approach to determine a home’s property taxes.
This approach is also commonly referred to as the market approach, sales comparison approach (SCA) or comparable sales method.