Module 5: Comping & Valuation

Step-by-Step Comping Process

Master the exact process to find, analyze, and use comparable sales to determine accurate property values

The 7-Step Comping Process

1

Identify the Subject Property

Start by gathering all essential details about the property you're evaluating:

  • Address: Full street address with ZIP code
  • Bedrooms & Bathrooms: Exact count (e.g., 3 bed / 2 bath)
  • Square Footage: Total living area (not lot size)
  • Year Built: Construction year
  • Condition: Current state (distressed, average, renovated)
  • Special Features: Pool, garage, updates, etc.
2

Define Your Search Area

Determine the geographic boundary for finding comparable sales:

  • Same Neighborhood: Start within 0.5 miles radius
  • Expand if Needed: Go up to 1 mile for similar properties
  • Same School District: Important for family markets
  • Similar Neighborhood Quality: Don't cross major highways or economic boundaries
3

Search for Recently Sold Properties

Use MLS, Zillow, Redfin, or public records to find sales:

Ideal Comp Criteria:

  • Sold within 90 days (180 days max in slow markets)
  • Same bed/bath count (±1 is acceptable)
  • Within ±20% square footage of subject property
  • Similar condition (renovated vs distressed vs average)

Goal: Find at least 3-5 solid comps to build confidence in your valuation

4

Gather Detailed Comp Data

For each comp, collect this information:

Property Details

  • • Address
  • • Sold price
  • • Sold date
  • • Square footage
  • • Bed/bath count
  • • Year built

Features

  • • Garage (1, 2, 3+ car)
  • • Pool (yes/no)
  • • Renovations
  • • Lot size
  • • Condition rating
  • • Special features
5

Make Adjustments

Adjust each comp's sold price to match your subject property's features. This is the most critical step.

Adjustment Direction:

  • If comp is BETTER than subject: SUBTRACT value from comp's sold price
  • If comp is WORSE than subject: ADD value to comp's sold price

See the "Making Adjustments" lesson for specific dollar amounts per feature.

6

Calculate Adjusted Values

After adjustments, each comp will have an "adjusted sold price" that reflects what it would have sold for if it matched your subject property.

Example Calculation:

Comp Sold Price: $250,000

+ Better garage (subject has 2-car, comp has 1-car): +$8,000

- Worse condition (subject needs updates, comp was renovated): -$15,000

- Larger square footage (comp is 200 sf bigger): -$10,000

Adjusted Comp Value: $233,000

7

Determine Final ARV

Look at all your adjusted comp values and determine a final ARV:

  • Average Method: Take the average of all adjusted comps
  • Weighted Method: Give more weight to the most similar comps
  • Remove Outliers: Discard any comp that's drastically different from the rest

Your Final ARV

This is the price you believe the property will sell for AFTER all repairs and updates are completed. Use this ARV to calculate your MAO using the 70% rule.

Pro Tips for Better Comping

Expert strategies to improve your accuracy

Use Multiple Data Sources

Don't rely on just one website. Cross-reference between MLS, Zillow, Redfin, and county records. Sometimes data conflicts - always verify.

Review Listing Photos

Look at comp photos to verify condition. A "3 bed 2 bath" could be builder-grade or fully renovated. Photos tell the true story.

Drive the Comps

If possible, drive by comp addresses. Street appeal, neighborhood quality, and surrounding homes matter. Two houses 0.5 miles apart can be in very different neighborhoods.

Be Conservative

When in doubt, use the lower end of the comp range. It's better to underestimate ARV and make a safe offer than overestimate and lose money.