- Outdated comps cost investors thousands in fast-changing markets like Las Vegas.
- AVM tools like Zillow have 6–10% average error margins, making them unreliable for real estate investing.
- Only comps from similar properties sold within 90 days deliver accurate property valuation.
- Investors using MLS-level comps enjoy up to 31% higher returns, per BiggerPockets research.
- Hyper-local data—down to zip codes and even street level—is essential for profitable real estate comps analysis.
Imagine losing $25,000 on a house flip—just because the data you trusted was off by a few blocks or a couple of months. That’s the reality when you rely on bad real estate comps. Real estate comps, short for “comparables,” help you figure out what a property is worth. Whether you’re buying your first rental or flipping in a hot market like Las Vegas, using old, not-matching, or misunderstood comps can completely blow your profit margin. As a top 1% agent who has sold over 4,000 homes, Steve Hawks understands that good investing depends on good data. We’ll explain what real estate comps are and how to use them the right way.
What Are Real Estate Comps?
Real estate comps—short for “comparables”—are recently sold properties that are similar to a property you are looking at. These features typically include
- Square footage range (±10-15%)
- Lot size
- Number of bedrooms and bathrooms
- Age of the property
- Location (best if in the same neighborhood or zip code)
- Property condition and upgrades
Comparables are not just about being close by; they are about being similar. A 3-bed, 2-bath house with 1,600 sq. ft. built in 1995 is not comparable to a 3-bed, 2-bath condo of 1,200 sq. ft. built in 2020 down the street. Real estate comps are the base for getting the right property value. They are used to
- Price homes before listing
- Figure out a fair offer for buyers
- Do appraisals for mortgage lenders
- Check if a real estate investment could make money
In short, comps are the main way to price real estate based on facts.
How Bad Comps Lead to Bad Investments
Using comps that are wrong or do not match can ruin a real estate deal from the start. For investors, it’s not just about pricing a property – it’s about protecting their profit and making the best return.
Think about a typical house flip: You find a fixer-upper, guess how much renovations will cost, and figure out its value after repairs (ARV) based on comps. If those comps are six months old or from a fancy neighborhood a few blocks away, your ARV could be too high. That leads to
- Paying too much for the property
- Trouble getting a loan (because appraisals are wrong)
- Finding it hard to sell at your target price
- Paying costs from the house sitting on the market too long
According to the National Association of Realtors (NAR), 23% of deals that fell through in 2022 happened because of appraisal problems—and many of these problems come from using comp data wrong.
On the flip side, bad comps that show properties are worth less than they are can make investors miss deals that could make money. A $300,000 property put next to old $270,000 sales might look too expensive. But in fact, it might be priced just right for the market.
In changing markets like Las Vegas—where home values can change a lot in just months—it’s most important that comps are current.
Why Public Data Isn’t Enough
Websites like Zillow, Trulia, and Redfin are good for looking up basic information. But they are not made for deep or exact real estate investment analysis.
Most of these sites use Automated Valuation Models (AVMs)—computer programs that guess home values using property details, past sales, and neighborhood numbers. AVMs are getting better all the time, but they still
- Miss human details (like upgrades inside the house)
- Have trouble with unique local things (for example, different values on opposite sides of the same neighborhood)
- Use sales data from public records that is old or not complete
A study by Collateral Analytics showed that AVMs had errors of 6–10% on average when compared to comps from the MLS in markets where home values change a lot.
A difference of 6–10% on a $400,000 home means a change of $24,000 to $40,000. This can completely get rid of the profit on a flip or make rental income much worse.
If you’re serious about real estate investing, only using free public data means you don’t have the full picture.
How to Analyze Property Comps the Right Way
Valuing property well using comps is not about how many you look at, but how good they are. It’s not enough to type an address into a tool—you have to look at the data carefully.
Here’s what to do to look at comps the smart way
- Search Radius: Stay within 0.5 to 1 mile of the property you are looking at. This helps you match community details.
- Recency: Look for sales that closed within 90 days or less. Fast markets like Vegas sometimes need even shorter times (30–60 days).
- Property Characteristics: Match homes for
- Year built ±5 years
- Square footage ±10-15%
- Lot size type
- Floorplan (like a split-level versus a single-story)
- Adjustments: Think about features like
- Renovations (new roofs, kitchens, flooring)
- Pools, garages, solar panels
- Corner lots or cul-de-sacs
- DOM (Days on Market): Homes that sell fast mean there is demand; slow sales might mean the price was wrong.
- List-to-Sale Price Ratio: See how much homes sold for compared to their asking price. This shows how much people are negotiating.
- Photo Verification: Always check the listing photos. The numbers don’t tell you if the home had nice counters or cheaper ones.
When you look at comps the right way, it helps you understand what the market is really doing in terms of money.
Real-Time Data Is the Only Data You Can Count On
Hot markets change very fast. In Las Vegas, the median home price rose 20% in one year around mid-2021, based on the Greater Las Vegas Association of Realtors. During times when prices go up like that, using comps from even three months ago might give you the wrong idea.
When you can’t get closed sales data right away, experienced investors look at
- Pending sales: These show what buyers are willing to pay and how prices are today.
- Active listings: These are not perfect for valuing, but they show you the highest prices in the area or what the competition is doing.
- Pre-foreclosures or distressed sales: These help investors set prices lower if needed, based on specific areas where properties might be undervalued.
Knowing how to read today’s numbers protects you from getting bad information from the past.
Key Data Points to Look at When Checking Comps
Price by itself never tells you everything. Experienced investors know they need to look at comps carefully using these details
- Price per square foot: This helps compare values for homes of different sizes.
- Date of sale: The newer the sale, the more it matters.
- Home size and layout: Similar numbers of bedrooms and baths, and similar room plans matter.
- Lot orientation or views: This is important, especially in places like Vegas with different types of land.
- Age and condition: A renovation from 20 years ago will not add as much value as one done last year.
- Upgrades and amenities: Things like pools, solar panels, or fancy kitchens change value a lot.
- HOA conditions: Does the neighborhood have gyms, clubhouses, or gates?
- School zones: This is key for neighborhoods with lots of families.
- Turnover frequency: This shows if people tend to stay in the neighborhood or move often.
Looking at all the comp details carefully keeps you from thinking the price to buy is too low—or thinking the price to sell is too high.
Investing in Las Vegas? Why Comps From Your Exact Area Matter
Las Vegas has many small, different markets within it. You might see two similar homes just 2 miles apart—one in Summerlin, the other in North Las Vegas—selling for prices that are 20% different.
This is not just random. Things specific to the local area change real estate comps, including
- School zones
- Job centers nearby (like the Strip, Allegiant Stadium, hospitals)
- How much demand there is for short-term rentals
- How easy it is to walk places and get to stores
- If it’s in a planned community, which often cost more (like Anthem or Inspirada)
Even the type of HOA—or the street name itself— can change comp values. That’s why Steve Hawks tells clients to never use comps from too wide an area. Always focus on the zip code or, even better, the specific neighborhood.
How Steve Hawks Looks at Comps Before Buying or Listing
Steve Hawks, an experienced agent who has sold over 4,000 homes, uses a careful process based on facts to get the price just right. His method includes
- MLS Pull: He gets 3–5 recent, main comps from the same neighborhood or area.
- PropStream Screening: He removes comps that don’t fit and compares the adjusted price per square foot.
- Physical Inspection: He visits the property to see how its condition, smell, light, and layout compare to the photos of the comps.
- Hyper-Local Indicators: He studies things like price fights, recent bidding wars, and appraisals from the last 30–60 days in the exact area.
This careful, step-by-step process means Steve never just uses computer values. It gives reliable help for real estate investing and figuring out property values.
Using Comps to Look at Rental Property
When you invest in rentals, figuring out the property value is looked at differently. Now, your main goal is making money from rent, not how much you can sell it for later.
To get good rental comps
- Use PropStream’s tool to find average rents for 1–3 similar properties nearby.
- Check with Rentometer to see rent trends in your ZIP code.
- Think about the time of year; rents can change in areas with a lot of tourists.
- Look at how many rentals are filled near the place you want to buy.
Once you know the rents are right, run your deal through these steps
- Cash flow analysis = Rent – Expenses – Mortgage
- Cap Rate = (Net Operating Income / Property Price) × 100
- GRM = Purchase Price / Annual Rent Income
- BRRRR Test = Make sure money from a cash-out refinance will pay back what you put in at first
Rent comps that are not right can lead to bad loan terms—or even worse, losing money each month.
Short-Term Trends Compared to Long-Term Value
Comps from the recent past show what’s happening now, but smart investors make choices based on what they think prices will do later—go up or down.
For people who flip houses
- Use the After Repair Value (ARV) from comps of homes that have been fixed up—not just data from homes that need work.
For people who buy and hold
- Think about things that might happen over a long time, like the neighborhood getting better, planned buildings or roads, or more jobs coming.
- Use estimates for how much equity you could pull out to avoid paying too much when the market is very hot.
Steve Hawks tells investors to be careful about comps from “distressed sales.” A short sale or foreclosure can make prices look lower, but that doesn’t show what the property is truly worth in the market.
How Using Good Comps Can Save You Lots of Money
Numbers tell you things—but you need to understand what they mean in the right situation.
An investor who worked with Steve Hawks did not pay $30,000 too much for a property in South Vegas. Why? Steve noticed that two sales nearby that were used as comps had a lower price per square foot because of problems with where they were located and they didn’t have upgrades. He looked at the comps again, filtering them and making adjustments. This showed that the market value was lower than the asking price. The deal was talked about again or the investor did not buy the property at all—saving tens of thousands of dollars.
Learning how to check comps carefully like Steve does can help protect your real estate investing money.
Investing Based on Facts Always Works Better Over Time
In the long run, using facts works best. According to BiggerPockets University, investors who used comps from the MLS made 31% more ROI on average compared to those who used public AVMs or just went with their feelings.
To do better, use a mix of
- Local comps from the MLS
- Bigger economic trends (like interest rate changes, people moving for jobs, how many homes are for sale)
- Past price patterns in markets that change with the seasons
- Tools like PropStream or MLS cloud connections
The more you make choices based on figuring out value the right way—and not just how you feel—the more steady your investing will be.
Final Thoughts: Work with Experts Who Know Their Market
You can find the data—but knowing how to use it is what makes the difference between new and experienced investors. Missing just one detail in real estate comps can completely ruin how much money you make.
If you buy and sell in Las Vegas or plan to invest in property there, working with an expert like Steve Hawks who knows the exact area gives you
- Reports on comps with clear explanations
- Seeing the property in person to check it
- Access to MLS data and an understanding of price trends that few others see
Want real estate investing that’s based on how much something is worth, not just guessing? Reach out to Steve Hawks to go over comps for a property you’re interested in before you do anything else.