What are comparables used for in real estate?

Comparables, often referred to as "comps," are properties that are similar to the subject property in terms of characteristics such as location, size, condition, and features. They are vital in the real estate process as they provide a benchmark for determining the market value of a property. By analyzing recent sales prices of these comparable properties, real estate professionals can accurately estimate what a property should be listed for or what it might sell for in the current market. This method is particularly important in pricing strategies, as it reflects current market trends and buyer behavior in the area.

While assessing the structural integrity of a property is crucial, it involves physical inspections and engineering assessments, which are unrelated to the function of comparables. Similarly, determining financing options is an entirely different aspect of real estate that focuses on the financial arrangements available to a buyer or investor. Lastly, while rental potential is important, it typically relies on market demand and specific rental comparables rather than the broader market analysis that standard comparables provide. Therefore, the primary role of comparables is indeed to help establish the market value of a property.