How Comparable Sales Work: The Method Behind Every Real Valuation

Every defensible home value comes from the same place: what buyers recently paid for properties that are genuinely similar to yours. The craft is in the word 'genuinely'.

What makes a good comparable

• Sold, firm and closed — not listed, not conditional, not expired.
• Recent: ideally within 90 days, and within 30 in a fast-moving market.
• Close: same neighbourhood, ideally the same pocket, and on the same side of any dividing line (a rail corridor, an arterial road, a school boundary).
• Same property type and style: semi to semi, bungalow to bungalow, two-storey to two-storey.
• Similar above-grade size, bedroom count and lot dimensions.

How adjustments work

No two homes are identical, so each comparable is adjusted toward your property. If the comp had a finished basement and yours doesn't, the comp's price is adjusted down. If yours has parking and the comp didn't, the comp is adjusted up. Adjustments are made per feature and should be defensible — 'parking is worth about $60,000 on this street because these two otherwise-matched sales differ by that amount'.

Common ways comparables go wrong

• Reaching too far geographically to find a supportive number.
• Using stale sales from a different rate environment.
• Comparing a renovated home to an original one without adjusting for condition.
• Ignoring the sales that don't support the desired answer — cherry-picking is the most common failure in listing presentations.
• Relying on price per square foot alone. It is a sanity check, not a valuation method, and it collapses on small homes and large lots.

What to ask for

Ask to see every comparable used, including the ones that came in low, and the reasoning behind each adjustment. A valuation you can audit is worth something. A single number with no supporting sales is worth nothing, no matter how confidently it's delivered.