When using the sales comparison approach, what does the appraisal process focus on primarily?

In the sales comparison approach, the primary focus is on comparing comparable properties to determine values. This method relies on analyzing recent sales data of properties that are similar in characteristics to the subject property being appraised. By identifying and evaluating the prices at which comparable properties have sold, an appraiser can establish a value for the subject property based on real market transactions.

The essence of this approach is to ensure that the appraisal reflects current market conditions and buyer preferences. For instance, factors such as the location, size, condition, and features of the comparable properties are taken into account to draw parallels with the subject property. Adjustments may be made to account for differences between the properties, thereby ensuring that the valuation remains accurate and justifiable based on empirical evidence.

This method is widely relied upon in real estate appraisal because it is grounded in actual market behavior, making it one of the most effective ways to estimate value in residential and commercial property assessments.