How Buyers Agents Use Comparable Sales Before Making an Offer

Knowing what a property is listed for is not the same as knowing what it may be worth.

A Sydney property might be advertised at $1 million, but that does not automatically mean $1 million represents its current market value. The asking price may reflect the vendor’s expectations, a selling agent’s pricing strategy, recent market conditions or competition between buyers.

Before making an offer, a buyers agent can use comparable sales to help establish a realistic price range for the property.

Comparable sales – often called “comps” – are recently sold properties that have characteristics similar enough to the property being assessed to provide useful evidence about its market value.

For buyers, this information can help answer an important question:

“What should I actually offer for this property?”

What Are Comparable Sales?

Comparable sales are properties that have recently sold and can be compared with the property you are considering purchasing.

A buyers agent may look at properties that are similar in:

• Location
• Suburb
• Property type
• Land size
• Building size
• Number of bedrooms
• Number of bathrooms
• Parking
• Condition
• Renovation level
• Age
• Layout
• Outdoor space
• Views
• Position within the street or development
• Strata characteristics for apartments and townhouses

The purpose is not to find an identical property.

Instead, the goal is to find relevant evidence from properties that buyers have actually purchased in the same market.

Why Comparable Sales Matter When Buying Property

Property advertisements can provide useful information, but an advertised price is not a completed transaction.

A property may be advertised at:

$900,000

but recent comparable properties could have sold for:

• $850,000
• $875,000
• $890,000
• $920,000

Those sales provide a much more useful starting point for understanding the price buyers have actually paid.

This does not mean the property should automatically sell for the average of those figures.

Every property is different.

The important part is understanding why one property sold for more or less than another.

How Buyers Agents Analyse Comparable Sales

A buyers agent does more than simply search for properties in the same suburb.

The comparison needs to be relevant.

1. Start With the Same Suburb or Immediate Area

The first step is generally looking for recent sales in the same suburb or immediate surrounding area.

Location can have a significant impact on property prices.

Two homes that look similar on paper can have different values because one might:

• Be on a quieter street
• Have a better position
• Be closer to transport
• Have better views
• Be further from major roads
• Have a better aspect
• Be closer to local amenities
• Have a different school catchment
• Be affected differently by surrounding development

For this reason, a buyers agent should consider the specific location of the property, not just the suburb name.

2. Compare the Property Type

A three-bedroom house should generally be compared with other relevant three-bedroom houses rather than apartments or substantially different property types.

Likewise, an apartment should generally be compared with apartments that have similar characteristics.

For example, an agent assessing a two-bedroom apartment may consider:

• Internal area
• Balcony size
• Car space
• Storage
• Floor level
• Aspect
• Building age
• Renovation level
• Strata fees
• Position within the building

The more relevant the comparable properties are, the more useful the evidence can be.

3. Look at Recent Sales

Property markets change.

A sale from several years ago may provide historical context, but it may not accurately reflect current conditions.

A buyers agent will generally place greater emphasis on recently completed sales, particularly where there are enough recent transactions to establish a meaningful comparison.

The relevant period can vary depending on the property type and the amount of sales activity in the area.

4. Compare Condition and Renovation

Condition can make a substantial difference.

Consider two houses in the same street:

Property A

• Original kitchen
• Older bathrooms
• Basic landscaping
• Dated flooring
• Requires work

Property B

• Renovated kitchen
• Modern bathrooms
• Updated flooring
• Landscaped backyard
• Move-in ready

They may have the same number of bedrooms and similar land sizes, but that does not make them equivalent.

A buyers agent needs to account for these differences when analysing the sales evidence.

The Highest Sale Isn’t Automatically the Right Comparable

One common mistake buyers can make is finding the highest recent sale and using it as justification for their offer.

For example:

“A similar house sold for $1.2 million, so this property must be worth $1.2 million.”

Not necessarily.

The other property might have:

• Larger land
• Better renovations
• Better street position
• Better views
• More parking
• A better floor plan
• A larger outdoor area
• Fewer defects

The highest sale may therefore not be the most relevant comparison.

A buyers agent looks at the differences between the properties, rather than simply selecting the highest or lowest sale.

What If the Comparable Property Is Better?

This is where the analysis becomes particularly useful.

Imagine the property you want to buy is a three-bedroom home.

A comparable property recently sold for $1,050,000.

However, that property had:

• A renovated kitchen
• Two bathrooms
• Better landscaping
• Larger outdoor entertaining area

The property you are considering has:

• One bathroom
• Original kitchen
• Basic landscaping
• Smaller backyard

Simply using the $1.05 million sale as your target may not be appropriate.

The differences need to be considered.

What If the Comparable Property Is Worse?

The same principle works in reverse.

If a nearby property sold for $900,000 but your property:

• Has been renovated
• Has better parking
• Has a superior position
• Has a larger block
• Has better outdoor space

then the $900,000 sale may provide a lower reference point rather than an indication that your property should also sell for $900,000.

This is why comparable sales analysis is not simply an averaging exercise.

Comparable Sales Can Help Establish an Offer Range

After analysing the available sales evidence, a buyers agent can develop a view of where the property may sit within the current market.

For example, the analysis might indicate:

Lower range: $920,000
Likely range: $950,000–$980,000
Upper range: around $1 million

These figures are not a guarantee of what the property will sell for.

An auction or competitive negotiation can result in a price outside the range suggested by previous sales.

The purpose is to give the buyer evidence to support their decision, rather than simply choosing a number based on emotion.

Comparable Sales vs the Selling Agent’s Price Guide

A selling agent’s price guide is part of the marketing process.

Comparable sales provide evidence from completed transactions.

That distinction matters.

A buyer should consider:

What is the property advertised for?

and separately:

What have similar properties actually sold for?

If the asking price appears significantly higher than relevant recent sales, a buyer may want to investigate why.

There may be a legitimate reason.

The property could have:

• Superior renovations
• A better position
• Larger land
• Exceptional views
• Better layout
• Development potential
• Other features that justify a premium

But those differences should be identified rather than assumed.

What Happens When There Are Very Few Comparable Sales?

Some properties are difficult to compare.

This can happen with:

• Unique homes
• Luxury properties
• Large acreage
• Unusual layouts
• Rare architectural properties
• Properties with development potential
• Very small apartment buildings
• Properties in areas with limited sales activity

In these situations, a buyers agent may need to broaden the research while being careful not to treat distant or substantially different properties as direct comparisons.

Other evidence can also become more important, including:

• Historical sales
• Nearby comparable properties
• Land value considerations
• Property-specific features
• Current competition
• Local market conditions
• Property improvements
• Development constraints

Comparable Sales Can Strengthen Negotiation

Comparable sales are not only useful for deciding whether to buy.

They can also help determine how to negotiate.

Suppose a property is advertised at $1.1 million but several relevant properties have recently sold around $950,000–$1 million.

That evidence can help a buyer understand where to position an offer and how much room may exist for negotiation.

A buyers agent may use the sales evidence to support the buyer’s position when communicating with the selling agent.

The conversation can move away from:

“We don’t want to pay that much.”

and towards:

“Based on the recent comparable sales and the differences between those properties and this property, our offer reflects the available market evidence.”

That is a much more evidence-based negotiation approach.

Don’t Ignore the Property’s Individual Features

Comparable sales are only one part of assessing a property.

A buyers agent should also consider the actual property being purchased.

This can include:

Location

• Street position
• Traffic
• Noise
• Surrounding properties
• Transport
• Amenities

Property

• Condition
• Layout
• Land
• Building
• Parking
• Orientation
• Views

Due diligence

• Building issues
• Pest issues
• Strata information
• Council records
• Planning matters
• Unapproved work

Market factors

• Current buyer competition
• Time on market
• Auction activity
• Vendor circumstances where known

The objective is to bring all of these factors together before deciding how much the property is worth to that particular buyer.

What Buyers Should Never Do With Comparable Sales

Avoid relying on a single sale.

One transaction can be affected by circumstances that aren’t obvious from the headline sale price.

Instead, look for a group of relevant sales and understand the differences between them.

Also avoid assuming:

“Same suburb = same value.”

A property on one street can have a very different market position from another property only a few streets away.

And don’t assume that the most recent sale is automatically the best comparable.

Relevance matters as much as recency.

Should You Get Comparable Sales Before Making an Offer?

If you are considering making a significant offer on a property, understanding recent comparable sales can help you make a more informed decision.

For many buyers, the difficult part isn’t finding a list of recent sales.

The difficult part is determining:

Which sales actually matter?

How are they different from the property I’m buying?

Does the property deserve a premium or discount?

What does the evidence suggest about the likely price range?

How should that information influence my offer strategy?

This is where a buyers agent can add value.

How Truth Group Helps Buyers Assess Value

At Truth Group, comparable sales form part of the broader property assessment and negotiation process.

We look beyond the advertised price and consider the available evidence surrounding the property, including relevant recent sales, property characteristics, location and market conditions.

The objective is not simply to tell a buyer what they should pay.

It is to help the buyer understand why a particular offer makes sense and how it fits within the available evidence.

Once the property has been assessed, the comparable sales can then be incorporated into the negotiation strategy.

Thinking about buying property in Sydney?

If you’re considering a property and want an independent buyer-side assessment before making an offer, Truth Group can help you research the property, assess the available evidence and negotiate on your behalf.

Buy Smarter. Negotiate Better.

[Speak with Truth Group about your next property purchase →]

Frequently Asked Questions

What are comparable sales in real estate?

Comparable sales are recently sold properties with similar characteristics to the property being considered. They can help buyers understand the prices achieved for similar properties in the area.

How many comparable sales should I look at?

There is no universal number. The usefulness of the evidence depends on the availability and relevance of the sales. Several genuinely comparable transactions can provide a stronger picture than relying on one sale.

Are comparable sales the same as a property valuation?

No. Comparable sales are evidence that can be considered when assessing a property’s market position. A formal valuation is a separate professional assessment and may be undertaken for different purposes.

Should I offer the same amount as a similar property that recently sold?

Not necessarily. Differences in land size, condition, location, layout, parking, renovations and other features can affect the comparison.

Can comparable sales help with property negotiation?

Yes. Recent relevant sales can provide evidence that helps a buyer establish and justify an offer position during negotiations.

Do buyers agents use comparable sales?

Yes. Comparable sales can form part of a buyers agent’s research when assessing a property and developing an offer or negotiation strategy.

Suggested internal links

I would not stuff this article with links. I’d naturally link to your existing relevant posts, particularly:

• Buyers Agent Sydney
• Buyers Agent Fees Sydney

This article is deliberately focused on comparable-sales analysis before an offer, rather than becoming another generic “how much can I afford” or property valuation article