How to Pick Comparable Sales for a BPO That Pass Review
Comps decide whether a BPO passes review. Here is a repeatable way to choose them.
Reviewers look at your comparables first. Good comps make your value obvious; weak ones trigger revisions and, over time, fewer orders. Here is a repeatable method.
Start with a tight search
- Distance: within half a mile in dense areas, one mile in suburbs, wider only in rural areas.
- Recency: sold in the last 90 days if possible, then six months.
- Type: same property type and style.
- Size: within about 20% of the subject's living area.
- Age: similar build era.
Bracket the subject
Choose sales that sit on both sides of the subject: one larger and one smaller, one in better condition and one worse. Bracketing shows the reviewer the subject's value is supported from both directions.
Match condition honestly
A renovated sale next door is not a good comp for a dated house needing work. Use condition notes and photos from the listing to judge.
When you have to stretch
Sometimes nothing fits. Expand distance or time one step at a time and say so in a sentence: "Comp 3 is 1.4 miles away due to limited sales in the subject's subdivision." Reviewers accept stretches that are explained; they flag ones that are not.
Active listings
Pick current listings that a buyer of the subject would also tour. Note days on market and price reductions; they show where the market is heading.
Common mistakes
- Reusing the same three comps on every nearby order.
- Crossing a major road, school boundary or neighbourhood line without comment.
- Ignoring distressed sales that clearly affect the market.
More: the complete BPO checklist.