I sat at a kitchen table in Mukwonago last spring with a seller who had three numbers in his head. One came from an online estimate. One came from what a neighbor said he got. One was what he needed to make his next purchase work. None of those three is a price. A price comes from what buyers have recently paid for the houses they would have considered instead of his.
That is all a comparable sale is. Not an algorithm, not a hope, and not what the house down the road is asking. It is a closed sale on a property a buyer would weigh against yours, adjusted for the ways the two differ. Here is how I build that picture.
What makes a sale comparable
A comp has to compete with your house in a buyer mind. In practice that means it is close on four things.
- Location. Same municipality where possible, because tax rates, utility service and assessments change at those lines. In rural parts of Waukesha and Walworth counties I widen the radius, simply because there are fewer closed sales to work with.
- Size and layout. Finished square footage above grade, bedroom and bathroom count, and whether the house is a ranch, a two story or a split. Someone shopping ranches is usually not also shopping two stories.
- Age and construction. A 1978 colonial and a 2021 build are not interchangeable at the same square footage. Mechanicals, windows and insulation are part of what a buyer is pricing.
- Timing. Recent closings, and I note when each one went under contract rather than when it closed. A contract written in January and one written in June were written into different conditions.
Lot size, acreage, outbuildings and water frontage matter a great deal in the market I work in, and they are the hardest features to find matches for. A three bedroom ranch on half an acre and the same ranch on five acres are two different listings to two different buyers.
The adjustments are where the number gets made
No two houses match, so every comp gets adjusted toward yours. Sellers rarely see this part, and it is the part that matters.
| Difference | How I handle it |
|---|---|
| Finished square footage | Adjust the comp toward your house, weighting finished lower level space differently than above grade space |
| Garage stalls, outbuildings, acreage | Look for pairs of sales that differ mainly in that one feature, and see how buyers actually treated it |
| Condition and updates | Judge the comp by what its photos and listing showed, not by its year built |
| Concessions in the closed sale | Read the price alongside the terms, because a sale with seller paid costs is not the same as one without |
| Days on market | A comp that sat for months and a comp that sold in a weekend are telling you two different things about its price |
When I am done I do not have one number. I have a range, usually a fairly tight one, and a clear sense of which comps are the closest matches and why.
Where the three bad numbers come from
The online estimate is a model working from public records. It does not know you finished the lower level, and it does not know your kitchen is original. It is a starting point for a conversation and nothing more.
The neighbor number is usually real but incomplete. People remember the price and forget the concessions, the repair credit, or the fact that it closed eight months ago.
The third number, what you need to net, is the one I take most seriously as a constraint and least seriously as a price.
The market does not know what you need to net, and it will not adjust for it.
If the range does not support the number you need, that is worth knowing in week one rather than week ten. Sometimes the answer is to sell anyway, sometimes to wait, sometimes to do a smaller amount of work first. I would rather have that conversation early.
Active and pending listings answer a different question
Closed sales tell you what buyers paid. Active listings tell you what you are competing against right now, and pending listings tell you what is working at the moment. I look at all three and weight them differently. An active listing is an asking price, which is to say it is somebody opinion. It becomes evidence only when it closes.
What I am not doing here
This is a broker opinion of value, not an appraisal. An appraisal is a separate, formal opinion from a licensed appraiser, and when your buyer is financing, their lender orders one on its own schedule and the appraiser reaches an independent conclusion. Those are not the same document and not interchangeable. A tax assessment is a third thing again, set by the municipality for a different purpose.
Pricing is a decision, not a calculation
Once there is a range, you still have to choose where in it to list, and that choice is strategic. Pricing at the top of the range asks the market to agree with your best case. Pricing toward the middle usually brings more showings in the first two weeks, which is when your listing gets the most attention it will ever get. I will tell you what I think and why, but it is your house and your call, and I will not pretend to predict the outcome of either choice.
If you are thinking about selling
If you want to see the actual comps for your house, I will pull them, walk you through the adjustments and give you the range with my reasoning attached, including the parts you may not want to hear. If you are selling in order to build, say so early, because the timing between a sale and a completion date takes planning. Reach out and we will start with the numbers.
