Which term describes similar properties that have sold in an area?

• A. Comparable
• B. Capitalization
• C. Balance
• D. Demand

Answer: (A)

Comparables, or comps, are properties that are similar to the subject property and have sold in the same area. Appraisers and agents use them to estimate value by comparing key features—size, age, condition, amenities, and location—and the sale prices those similar properties achieved recently. The closest comps are chosen and adjustments are made for any differences to arrive at a plausible value for the subject property. This approach ties the valuation to actual market transactions rather than guesses, giving a grounded estimate of value. The term described here is not about income capitalization, which uses income and capitalization rates; nor is it about balance or demand, which refer to other concepts in real estate markets.