BPO Adjustments Explained: Accounting for Differences Between Comps

No comparable sale is a perfect twin of the subject. Adjustments are how you account for the differences, and they are one of the areas reviewers look at most closely.

Adjust the comp, not the subject

The question is always: what would this comp have sold for if it were more like the subject? If the comp has a garage and the subject does not, the comp's price comes down. If the comp is smaller, its price goes up.

Common adjustment areas

• Living area: often the largest adjustment.
• Bedrooms and bathrooms: especially a missing bathroom.
• Condition and updates: renovated kitchen versus original.
• Garage and parking.
• Lot size and location: busy road, corner, water or view.
• Age: where age reflects real differences in buyer appeal.

Use local market reasoning

Adjustment amounts vary a lot by market and price range. Base yours on what you see locally, such as paired sales of similar homes with and without a feature. Some vendors publish their own guidance; follow it when they do.

Keep adjustments reasonable

If a comp needs large adjustments in several areas, it may not be a good comp. Look for a closer match before you stack adjustments on a weak one.

Explain the big ones

You do not need to justify every small adjustment, but a sentence on the largest ones makes your report much easier to review and reduces revision requests.

A simple worked approach

Start with the comp's sale price. List each meaningful difference from the subject. Decide the direction of each adjustment: up if the comp is inferior, down if it is superior. Apply amounts you can support from local evidence. Then look at the adjusted prices of all your comps together. If they land in a reasonably tight range, your value is well supported. If one comp sits far from the others after adjusting, either your adjustments need another look or that comp is not a good match.

Related: how to pick comps for a BPO.