The Sales Comparison Approach (SCA): What It Is and How to Use It

Susan Kelly

Jun 20, 2022

The Sales Comparison Approach is a very popular sales technique used by real estate agents to help their clients find the perfect home. The SCA can be seen as an alternative to a traditional search and selection process, in which buyers have just one or two days to view open houses and dozens of homes before making an offer on one.

With the SCA, buyers are encouraged to make more than one offer on homes, typically in accordance with what they want for their ideal home at a certain price point. An agent usually uses this approach when more than 50% of its active listings are under contract.

The SCA is a relatively new sales technique that has been growing in popularity over the last 12 years. It's a very good option for buyers who are especially picky, or who have visited only a few open houses and want to visit potential homes with multiple agents.

In addition to being great as an alternative to traditional searching, the SCA is also good for sellers who want to maximize their return on investment (ROI) with their home sales. This strategy can help you find homes that are just close enough to your current home that you can still see improvements, but not so close that some minor modifications will bother you. This process may also seem like too much work for sellers if several offers are rejected. However, homeowners who want to find the best deal possible for their home should consider selecting the SCA as a sales approach.

How does Sales Comparison Approach Work?

When using this strategy, a real estate agent will help a client determine how much they can afford and what they would be willing to pay for an ideal house. Then, instead of viewing homes alone or with just one other agent, prospective buyers can see as many as 20 homes in no 10 days. After visiting these homes with the realtor, the buyer then chooses which ones they like and makes offers on them – usually two offers at a time – until finding their dream home. There are several advantages to this process:

  1. Buyers don't have to make a quick decision, which helps them avoid rushing into something they'll end up regretting. This method offers more time for reflection and consideration, which can ultimately lead to a happier home purchase.
  2. The SCA gives buyers the opportunity to visit homes with more than one agent, allowing them to compare information and get an even better idea of what they want in a home and how much they should spend in order to achieve it. This is especially useful for buyers who aren't familiar with the area.
  3. The SCA allows buyers to negotiate prices, so they can make a better decision than the one made based on their initial gut feeling.
  4. The SCA helps buyers determine if a home is an acceptable price for the area, and not just compared to the other homes in their neighborhood.

The SCA involves selecting the homes which you are interested in viewing and then contacting one or more real estate agents to set up a time to view those homes. You would typically use this approach if you have only visited a handful of open houses and have no idea where you're going to buy. Having multiple offers on multiple homes eliminates the stress of having to make a decision on your first home viewing. You have time to analyze the market and do your homework.

Who is Sales Comparison Approach best suited for?

The SCA is most often used by buyers who are especially picky about their house and those who have little knowledge about the area in which they want to buy a home. This approach can also be helpful to sellers who have owned their home for a long time but still have some equity in it.

Real estate agents who choose to use this strategy typically have a large selection of homes for sale. If an agent only uses the SCA when 50% or more of its active listings are under contract, it shows that they are confident they can find their clients the perfect home with very little risk.

What is Sales Comparison Approach good for?

The SCA is good for buyers who want to spend more than 1-day visiting potential homes as it gives them time to analyze their options and search for the best deal. It is also a good option when you simply don't know where you want to live or don't have much experience in this area. It allows a buyer to take all the time they need to find a great home.

Also, if you're looking for something that is not brand new, this is a good option as it allows you to search for homes that are just close enough to your current home that you can still see improvements, but not so close that some minor modifications will bother you.

How do I put an offer in with the Sales Comparison Approach?

When using the SCA, a buyer prepares at least 2 offers on homes they have already viewed and want to buy. The offers include the price at which the buyer would be willing to purchase their dream home and other information needed by the seller. After that, the buyer waits for the seller or their agent to respond to the offers. If your offer is accepted, great! You can now celebrate finding your new home. Either way, sellers can find out what the market price is for their home by shopping it around with other agents and seeing which one gives them the best deal. The SCA is a great option for those buyers who really want to ensure they find a home that is at a price point that works for them and meets their needs. It can also be used in areas where multiple offers are not always made when homes hit the market. If a buyer is using this strategy, the SCA will be a great tool for the buyer and their realtor to use when securing their new home.

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