01 / 04 · Comparable sales
How to choose property comps you can defend
A comp is useful only if you can explain why it belongs in the set. Distance alone does not make two properties comparable.
The take
The shortest defensible comp set beats a long list of nearby sales.
Start with properties that do the same job
Begin with use, buyer pool, and location. A nearby sale built for a different tenant or investor can be less useful than a slightly farther property that competes for the same demand.
- 01
Property type and use
Match the real use of the building, not just the label in a database. Office, medical office, flex, warehouse, retail, and mixed-use properties trade on different facts.
- 02
Buyer and tenant pool
Ask whether the same buyers or tenants would seriously consider both properties. If the answer is no, the sale needs a strong reason to stay in the set.
- 03
Location and access
Compare the submarket, road access, visibility, surrounding uses, and demand drivers. Straight-line distance is only a starting point.
Put every sale in its market moment
A sale records what one buyer and seller agreed to on one date. Interest rates, available financing, rent expectations, and local supply may have changed since then.
- 01
Sale and contract dates
Use the contract date when it is available. It is closer to the moment the price was negotiated than the recording date.
- 02
Market movement
State whether pricing, rents, vacancy, or borrowing costs moved between the comp date and the valuation date. Do not hide a time adjustment inside the conclusion.
Normalize before you compare
Headline prices hide the differences that actually move value. Put every comp on the same basis, then explain the remaining gaps.
- 01
Physical differences
Check size, age, condition, site area, parking, loading, unit mix, floor plan, and any major capital work.
- 02
Income differences
Check occupancy, rent level, lease term, tenant credit, expense structure, and near-term rollover before comparing income-producing properties.
- 03
A common denominator
Price per square foot, price per unit, and capitalization rate can help, but only after the underlying measurements and income definitions match.
Read the transaction, not just the price
A recorded price may include unusual financing, a portfolio allocation, a partial interest, personal property, or a relationship between the parties.
- 01
Confirm what sold
Match the parcel, building, ownership interest, and included property to the reported price.
- 02
Look for unusual terms
Seller financing, sale-leasebacks, tax-deferred exchanges, portfolio sales, and non-arm's-length deals may need extra explanation or exclusion.
- 03
Keep the receipt
Record the source, document date, and any calculation used for every material figure. A conclusion is easier to trust when someone else can retrace it.
The five-question comp check
Before a sale makes the final set, answer these questions in one sentence each.
- 01
Why this property?
Name the shared use, buyer pool, or physical trait that makes the sale relevant.
- 02
Why this location?
Name the shared submarket or demand driver instead of relying on mileage alone.
- 03
Why this date?
Explain why the market conditions are still useful or show the time adjustment.
- 04
What is different?
List the two or three differences most likely to move price and how they affect the comparison.
- 05
Can another person verify it?
Keep the source and calculation beside the conclusion.
Put the comp discipline on every ZOVA workup
ZOVA turns this checklist into a repeatable broker workflow, so the comp set, source trail, pricing logic, and deal position stay connected.
- 01
Profile every sale
ZOVA shows why a candidate comp belongs, what differs from the subject, and which fields need broker confirmation instead of treating proximity as relevance.
- 02
Keep the receipt
Material figures retain their source, so the broker can defend the range and replace weak evidence without rebuilding the analysis.
- 03
Carry the set into the pitch
The selected comps flow into the buy-side or sell-side position and the BOV, OM, or IC artifact instead of dying in a spreadsheet tab.
This guide is educational. ZOVA is not an appraisal, lender, law firm, engineering firm, tax adviser, insurer, or investment adviser. Confirm material decisions with the appropriate professional and the current source documents.