How to Analyse Comparable Sales Before You Offer

A house can look fairly priced beside the last sale on the same street and still be materially different. One may sit on 405 square metres with a steep rear yard. The other may have 607 square metres, usable outdoor space and two streets of frontage. The sale price alone does not answer the question.

Knowing how to analyse comparable sales means separating useful market evidence from convenient evidence. It is one of the most practical disciplines a buyer can apply before making an offer or bidding at auction. The aim is not to find a single number that proves what a property is worth. It is to establish a defensible price range, identify the factors that could move that range, and decide where you are prepared to stop.

Start with the property you are actually buying

Before selecting any sales, write a short profile of the target property. This prevents the common error of comparing a property with whatever has sold recently, rather than with property a buyer would genuinely substitute.

For a residential house, record the land area and shape, zoning, dwelling age, condition, bedrooms, bathrooms, parking, pool, views, aspect, flooding history and renovation quality. Also record the street type. A quiet pocket of Camp Hill may command a different buyer pool from a busy collector road only 400 metres away.

For units and townhouses, the building matters as much as the dwelling. Note the floor area, car spaces, level, outlook, body corporate costs, number of lots, building age and upcoming works. A two-bedroom unit in a small Auchenflower complex with one car space is not directly comparable with a larger new apartment in a tower, even if both have the same postcode.

Commercial property needs a separate profile. Record the net lettable area, land area, zoning, access, parking, condition and tenant use. Then examine the lease. Net yield is the annual net rent divided by purchase price, after the costs borne by the owner. WALE, or weighted average lease expiry, measures the average remaining lease term across a property or portfolio, weighted by rental income. A retail shop with five years remaining to a strong tenant is not comparable with a vacant shopfront beside it.

Build a comparable sales set, not a single example

A sound analysis generally begins with three to six close sales. In a tightly defined market, there may be fewer. In a suburb with many similar homes, you may have more. Quality matters more than quantity.

Start with sales from the previous three to six months. In a fast-moving market, older evidence can become less reliable. In a thinly traded prestige or commercial market, you may need to look back 12 months or further, then apply more caution to the result.

Select comparables using the following hierarchy:

• Same property type and a similar buyer use, such as family home, townhouse, medical suite or small warehouse.

• Same micro-location, including school catchment, flood exposure, transport access, noise and street appeal.

• Similar land, building size and functional layout.

• Similar condition, renovation level and development potential.

• Similar sale date and sale conditions.

The last point is often overlooked. A sale between related parties, a distressed sale, or a campaign with only one bidder may not reflect normal market competition. Equally, an exceptional result can be real but should not be treated as the default benchmark without evidence of several buyers competing for the same features.

In Brisbane, a planning overlay can materially affect comparability. An overlay is a planning control that identifies a constraint or special consideration, such as character housing, flooding, heritage or bushfire risk. Two houses with similar land areas in Paddington may differ sharply if one site has a character-protected dwelling and the other has more flexible redevelopment potential. Read the planning context rather than assuming every block carries the same options.

Verify what the sale price represents

A recorded result is only the starting point. Ask when the contract was signed, when it settled, how long it was marketed and whether the property was passed in before selling later. Contract date is usually more relevant than settlement date because it reflects buyer sentiment when the price was agreed.

Where possible, inspect the comparable from the street and review its listing history, photos and floorplan. This is especially valuable for remote buyers. A sale record rarely reveals a dark internal layout, poor access, major retaining walls or a busy road behind the fence.

For commercial evidence, confirm whether the reported figure reflects the property alone or includes plant, equipment, business goodwill or other components. Check whether the sale was vacant or leased. A warehouse in Eagle Farm sold with a secure tenant and a long lease should not be compared on a simple dollars-per-square-metre basis with a vacant owner-occupier opportunity.

Adjust for differences, but do not invent precision

Once you have a credible sales set, compare each sale against the target property feature by feature. The most useful approach is to rank each comparable as superior, similar or inferior on the attributes that buyers are likely to pay for.

For example, consider a renovated three-bedroom home in Moorooka on 506 square metres. A nearby sale on 405 square metres may be useful, but it is likely inferior on land area. Another sale on 607 square metres may be superior if it also has a level yard and better street position. A third home with similar land but an unrenovated kitchen may be inferior on condition. These sales establish a range around the target, not an arithmetic average.

Some adjustments can be supported by repeated local evidence. If several sales show that an additional car space, a level usable yard or a high-quality renovation consistently changes buyer behaviour, that pattern deserves weight. Other adjustments are too uncertain to express as a precise dollar figure. Views, natural light and street appeal often fall into this category.

Avoid the temptation to add fixed amounts mechanically. Saying a pool is worth exactly $80,000 or a bedroom is worth exactly $100,000 across every Brisbane suburb creates false confidence. The contribution depends on the suburb, land value, property price bracket, buyer demographic and the quality of the improvement. In some family areas a pool broadens appeal. In a compact inner-city courtyard home, it may reduce usable outdoor space and narrow the buyer pool.

Read the spread, not just the midpoint

After ranking the sales, establish a low, central and high indication. The low end should reflect credible evidence for an inferior or less competitive version of the target. The high end should be supported by a genuinely comparable superior result, not simply the highest sale in the suburb.

Then test the range against current competition. Are similar homes being listed at the same time? Have properties been selling before auction? Are days on market tightening or lengthening? Days on market measures the time between listing and sale. It is useful context, but it can be distorted by withdrawn listings or vendors who relist a property.

Current asking prices are not comparable sales. They can show supply and vendor expectations, but they do not prove what a buyer has paid. Treat them as a live market check, not as primary evidence.

If the target is going to auction, separate your evidence-based range from your walk-away limit. The second number reflects your own alternatives, timing and risk tolerance. A well-supported price assessment can tell you where competition has been rational. It cannot decide how much a particular property is worth to you.

Apply a different lens to commercial comparables

Commercial sales analysis needs both physical and income comparison. Price per square metre may help compare small industrial units, but it is incomplete without rent, lease structure and tenant risk.

Consider two strata warehouses in Northgate, each with 250 square metres of building area. One is vacant and suitable for an owner-occupier. The other is leased for three more years to a tenant paying above-market rent. Their sale prices may differ for valid reasons. The leased asset may show a sharper yield because of income certainty, or a buyer may discount it if the rent looks unsustainable at renewal.

Review outgoings, which are operating costs such as rates, insurance, maintenance and body corporate charges. Confirm who pays them under the lease. Also check rent review clauses, options, incentives, make-good obligations and the tenant's payment record. These items can alter the real income position more than a small difference in building area.

Keep an audit trail before you negotiate

A comparable sales analysis should be easy to challenge. Keep a table or file showing each sale, its source, contract date, property attributes, inspection notes and reasons for inclusion or exclusion. Record your superior, similar and inferior rankings rather than relying on memory after a busy auction campaign.

At East Point Buyers Agency, this documented reasoning is central to price assessment because buyers need to understand not only the recommended range, but also its limits. If evidence is thin, say so. If a target property has unusual features, widen the range. If the best comparable is six months old, explain why it still carries weight or why it does not.

The most useful question before making an offer is simple: if this property sells above our range, what comparable evidence justifies paying more? If the answer is unclear, pause. A disciplined buyer does not need perfect certainty. They need a clear record of what the market supports, what remains uncertain and what they are choosing to pay for.