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Comp Analysis Exercises

10 min
4/6

Key Takeaways

  • Building comp grids with real data develops muscle memory for the adjustment process.
  • Price-per-SF analysis provides a quick reasonableness check on your adjustments.
  • Include/exclude decisions develop judgment—there is rarely one "right" answer.
  • Reconciling wide ranges requires weighing comp reliability, not just averaging numbers.

These four hands-on exercises develop your comp analysis skills using real-world scenarios. Each exercise targets a different aspect of the comp analysis process, from data gathering to adjustment calculation to reconciliation decision-making.

1

Exercise 1: Pull and Analyze 5 Comps for a 3BR/2BA

Select a 3BR/2BA home in your target market (or use any address from Zillow/Redfin). Search for five comparable sold listings within 1 mile and 12 months. For each comp, record: address, sale price, sale date, GLA, bed/bath count, condition, garage, lot size, and any special features. Build a comp adjustment grid with adjustments for time, size, condition, bed/bath count, garage, and lot size. Use these adjustment values: $40/SF for size, $5,000 per bathroom, $12,000 for garage, 0.3% per month for time (if appreciating market). Calculate the adjusted price for each comp and reconcile to a value conclusion. Exercise 2: Price-Per-Square-Foot Analysis. Using the same five comps, calculate the price per square foot (sold price ÷ GLA) for each. Calculate the unadjusted mean, median, and range. Then calculate the adjusted price per SF (adjusted price ÷ subject GLA). Compare unadjusted and adjusted $/SF—the adjusted range should be tighter if your adjustments are correct. If the adjusted range is wider than the unadjusted range, your adjustments may be introducing error rather than reducing it.

Self-Check
Good adjustments should narrow the range of indicated values. If your adjusted values have a wider spread than unadjusted sale prices, re-examine your adjustment values—one or more may be too large or incorrectly directioned.
2

Exercise 3: Include/Exclude Decision from 8 Candidates

You have pulled 8 candidate comps for a subject property. Three are in the same subdivision, two are in adjacent neighborhoods, one is a foreclosure, one is a new construction with builder incentives, and one is 14 months old. Decide which to include and which to exclude, documenting your reasoning for each decision. There is no single correct answer—the exercise develops your judgment in comp selection. Exercise 4: Reconcile a Wide Range. Your analysis produces adjusted values of $245K, $258K, $272K, $280K, and $285K. The $245K comp is in the same subdivision but was a divorce sale. The $285K comp is the most physically similar but 1.2 miles away in a slightly better neighborhood. Reconcile this $40K range (16% spread) into a single value conclusion. Consider: which comps are most reliable? Should you exclude the divorce sale? How much weight should distance receive? What value range would you present to justify your offer? Document your logic in a format you would present to a lending partner.

Guided Practice: Self-Checking Adjustment Quality

After adjusting 5 comps, your unadjusted range is $310K-$345K (11.3% spread) but your adjusted range is $325K-$360K (10.8% spread).

  1. 1The adjusted range barely narrowed—adjustments may not be improving accuracy.
  2. 2Review each adjustment line item: which single adjustment caused the most variation?
  3. 3You find that your $18K condition adjustment on Comp 3 may be too aggressive.
  4. 4Reduce the condition adjustment to $12K based on paired sales evidence.
  5. 5Re-run: adjusted range narrows to $328K-$348K (6.1%)—much better convergence.

Key Takeaways

  • ✓Building comp grids with real data develops muscle memory for the adjustment process.
  • ✓Price-per-SF analysis provides a quick reasonableness check on your adjustments.
  • ✓Include/exclude decisions develop judgment—there is rarely one "right" answer.
  • ✓Reconciling wide ranges requires weighing comp reliability, not just averaging numbers.

Sources

Common Mistakes to Avoid

Selecting comparable properties based on price proximity to a desired value rather than true similarity.

Consequence: Circular reasoning confirms a predetermined conclusion instead of independently estimating market value.

Correction: Select comps based on physical and locational similarity, not on how close their prices are to your target.

Failing to adjust for differences in transaction conditions between comparable sales.

Consequence: Non-arm's-length sales, seller concessions, and financing terms can distort the comp set by 5-15%.

Correction: Verify transaction type and terms for all comps and make appropriate adjustments.

Test Your Knowledge

1.In Comp Analysis Exercises, what determines the reliability of a comparable sale?

2.What is the maximum recommended net adjustment for a single comparable sale?

3.How should the final value be determined from multiple adjusted comparable sales?

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