In the sales comparison approach, what is the basic structure of the model for determining market value?

In the sales comparison approach, the basic structure of the model uses the formula where market value is derived from the sale prices of comparable properties, along with any necessary adjustments made to account for differences between the subject property and those comparables. The formula reflects that the market value (MVs) is equivalent to the sale price of comparable properties (Sc) plus any adjustments (Adj).

This approach is grounded in the principle that the value of a property is best indicated by the sale prices of similar properties in the market, adjusted for variations such as size, location, condition, and other factors that might affect value. By taking the sale price of comparable properties and adding adjustments, appraisers are able to arrive at a more accurate estimate of a property's market value, tailored to its unique characteristics.

The inclusion of adjustments is crucial; they allow for a more precise comparison to be made, ensuring that the market value assessment takes into account the specific features and market trends impacting the subject property, thus providing a clear and justified valuation.