Why Comparables Matter in Real Estate
One of the best ways to determine a property’s true market value is by using comparable sales – recently sold homes in the same area with similar characteristics.
By analysing location, size, condition and market trends, buyers can confidently assess whether a property is priced appropriately. This approach helps to avoid overpaying and provides a strategic edge in negotiations. Whether you are a first home buyer, an investor, a downsizer or looking for your next family home, understanding comparables is a fundamental step in securing the right property at the right price.
What Are Comparables in Real Estate
Comparables, commonly referred to as comps, are similar properties that have recently sold in a given area. Real estate professionals, including buyers advocates, use these sales to assess a property’s fair market value.
Why Comparable Sales Matter:
- They provide a data driven approach to property valuation.
- Buyers can use comps to negotiate a fair price.
- Banks and lenders assess comps to determine loan approval and property risk.
A buyers advocate will typically conduct a detailed comparable sales analysis to ensure their client is making an informed decision before purchasing a home. This expertise helps remove emotional bias from the process and ensures buyers get the best outcome possible.
Key Factors to Consider When Comparing Homes
Not all properties are equal, so when reviewing comparable sales, focus on these key elements:
1. Location
- Properties in the same suburb or neighbourhood provide the best comparison.
- Proximity to schools, transport, shopping centres and employment hubs impacts value.
- Look for trends in gentrification and upcoming infrastructure projects.
2. Size and Layout
- Compare properties with a similar land size and building footprint.
- Consider the number of bedrooms and bathrooms.
- Check if the layout is functional or outdated.
3. Condition and Upgrades
- Renovated homes will have a higher value than unrenovated properties.
- Look for structural issues, maintenance history and modern inclusions.
- Features like solar panels, energy efficient appliances and smart home technology can impact price.
4. Market Timing and Trends
- Recent sales (within the last 3-6 months) reflect current market conditions.
- Consider seasonal changes: spring markets often have higher competition.
- Monitor interest rates, investment trends and government incentives.
How to Find and Analyse Comparable Sales
Where to Find Reliable Comps:
- Real estate platforms like realestate.com.au, Domain and CoreLogic.
- Public sales records and local council data.
- Insights from a buyers advocate with access to off market sales.
Step-by-Step Comparable Sales Analysis:
- Identify at least three recent sales of similar properties in the area.
- Compare key features such as land size, house size, number of rooms and condition.
- Adjust for differences (e.g. an extra bedroom or a pool may increase value).
- Analyse active listings to gauge current competition and market trends.
Data Backed Insights:
- Studies show accurately priced homes sell 50% faster than overvalued properties.
- Buyers who use comps effectively save 3-5% on purchase price through informed negotiations.
Common Mistakes to Avoid When Using Comparables
1. Ignoring Market Changes
Market conditions shift quickly. Always use recent sales data rather than outdated information.
2. Relying on Unverified Sources
Online property estimates can be misleading. Always verify data through reliable real estate sources or a buyers advocate.
3. Overlooking Unique Property Features
Not all homes are equal. Consider whether a property has a view, larger land size or premium finishes, as these factors impact value.
4. Not Considering Competition
Active listings indicate market demand. If similar homes are sitting unsold for weeks, sellers may be open to negotiation.
The Role of a Buyers Advocate in Property Comparisons
A buyers advocate specialises in market analysis, negotiations and property acquisition, ensuring clients make data driven decisions when purchasing a home.
Why Work with an Expert?
- Access to off market sales and exclusive data.
- Expertise in market trends and property valuation.
- Objective insights to remove emotional bias from purchasing decisions.
Case Study:
A recent client was considering a home listed at $1.2M. After conducting a detailed comparable sales analysis, our team at Inview Property Group identified that similar properties in the area had sold for closer to $1.15M. With this knowledge, we successfully negotiated a $50,000 reduction, securing the property at a fair market price.
Make Smarter Property Decisions with Comparables
Understanding comparable sales is key to making a smart, informed property purchase. By analysing location, size, condition and market trends, buyers can confidently assess value and negotiate effectively.
Key Takeaways:
- Use recent comparable sales to assess fair market value.
- Consider location, property condition and competition.
- Avoid common mistakes such as relying on outdated data.
- Engage a buyers advocate to provide expert insights and negotiation strategies.
Thinking of buying a home? Let Inview Property Group help you navigate the market with expert insights and negotiation strategies. Contact us today for a no obligation consultation.
By Lynda McNeill
