When using the comparative sales approach to value, the appraiser must: be aware that the comparable sales are essentially the same. adjust the subject property to bring it in line with comparable sales. disregard any adjustment for the dates that the comparable sales sold. adjust the comparable sales to indicate the value of the subject property.

Question

Hadley Andrews

Business

11 September, 03:23

When using the comparative sales approach to value, the appraiser must: be aware that the comparable sales are essentially the same. adjust the subject property to bring it in line with comparable sales. disregard any adjustment for the dates that the comparable sales sold. adjust the comparable sales to indicate the value of the subject property.

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Braxton Ballard · Answer 1

adjust the comparable sales to indicate the value of the subject property.

Explanation:

When an appraiser compares different properties, he/she must use the same unit of comparison, e. g. you cannot compare price per square foot to price per foot of water frontage. It is uncommon for several properties to be exactly the same, therefore you must use the same unit of comparison, e. g. a house with three bedrooms can be compared to a house with 4 bedrooms if you use the price per square foot comparison.

Comparable sales approach is a method used to assign value to properties by analyzing the sales prices of comparable properties in the market. For another sale to be considered comparable, it must compete with the given property; it must be on the same market and appeal to the similar buyers.

Appraisers look for good comparables in order to get adequate and reliable reference values. The greatest strength of the comparable sales approach is also its greatest weakness, it relies on market data.