You’re working with your Realtor to price your home and he starts talking about comps. So what are they and why are they such a big deal when you price your home.

What are comps or comparables?

Comparables, or comps, are lists of homes that are similar to yours that have recently sold. They use it to get an idea of market price. Here’s how it works. Let’s say you have a 4 bedroom, 2 bath home on a quarter acre. Your Realtor will put that information into a database of recently sold homes and find ones that are like yours to see what their selling price was. It’s a typical way to get a price, though not all comps are created equal.

Comps work well when your home and the comps are from a very similar area

The problem comes in when there are one of a kind items in your property or in the others. That can seriously affect how your home is priced. If it prices your new home too high, you’ll have problems selling. Too low and you cheat yourself.

Here are things that can seriously affect comp values

Living in or close to a crime ridden area, or more accurately, on a crime ridden block or two. If you live on a good block, but one or more of the comps are from a not so great block, their values would be lower than yours should be, or visa versa. If this is the case, your Realtor should hit the streets and find sales closer to home. Should being the operative word.

In the same boat is if your property, or the others, have the misfortune to be next to a serious problem, like a Superfund site, mill, water or waste treatment plant or airport.

Check the comps yourself

Check the comps and see if they are not just beds and baths similar, but square footage similar as well. There is a big difference between a 3 bedroom home that has 1500 square feet and a 3 bedroom home with 2500 square feet. Also the size of the rooms matters. A 1970’s home has impossibly small bedrooms as opposed to a newer construction that made bedrooms larger.

Your best bet is to be educated and not be afraid to challenge any comps you see that aren’t truly comparable.