How should buyers think about comparable sales?
Comparable sales help establish context for what buyers have recently paid for similar properties. They can be useful evidence of value, but they aren’t a price you have to pay, and they don’t tell you whether a property makes sense for you.
The real question isn’t simply “What did the comparable sell for?”
It’s “How comparable is it, and what do the differences mean?”
What makes a comparable actually comparable?
Location, property type, size, condition and timing are useful starting points, but the analysis shouldn’t stop there.
For a Greater Vancouver condo, for example, I may also look at the building, floor level, exposure, view, layout, parking, storage, outdoor space, renovations and relevant strata considerations.
Two units in the same building can look nearly identical in a spreadsheet and still justify different conclusions.
Recency matters too, but the newest sale isn’t automatically the most useful. A slightly older transaction involving a much more similar property may provide better context than a recent sale that differs materially from the one you’re considering.
What don’t comparable sales tell you?
A comparable reflects what someone else paid for a different property at a particular point in time.
It doesn’t account for your financing, timeline, alternatives, objectives or what the property needs to do for you.
It also doesn’t make every difference between two properties neatly quantifiable. A better layout, different exposure or significant renovation may matter, but assigning a precise dollar value to every difference can create a false sense of certainty.
That’s why I prefer to look at a group of relevant transactions, understand the pattern they create and then examine where the property in front of us fits within that context.
How do I use comparable sales with buyers?
I put the relevant sales beside the property we’re considering and identify what is genuinely similar, what isn’t, and where those differences may matter.
Then we bring the buyer back into the analysis.
Comparable sales might strengthen the case for a particular price. They might change the terms or price you’re comfortable with. Or they might help reveal that another opportunity makes more sense.
The purpose isn’t to make the comparable fit the decision.
It’s to give you better information with which to make yours.
This is general information, not an appraisal or a recommendation to purchase a property or offer a particular price.
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