Which method is commonly used to assess residential properties by reviewing similar sales?

The method commonly used to assess residential properties by reviewing similar sales is the Direct Sales Comparison approach. This technique involves analyzing the sale prices of comparable properties in the same market to estimate the value of a particular property. It considers factors such as location, size, condition, and amenities, allowing appraisers to draw meaningful comparisons. The underlying principle of this approach is that a property's value is influenced by the sale prices of similar homes in the area, making it particularly effective for residential assessments where market activity is active and there are numerous comparable sales available.

In contrast, the Comparative Market Analysis is often used in real estate to suggest a listing price for a property based on comparable properties, but it does not strictly adhere to the formal assessment standards used for tax purposes. The Cost Approach evaluates property value based on the cost to replace or reproduce it minus depreciation, making it more suitable for new constructions or unique properties rather than typical residential sales comparisons. The Income Approach, primarily used for commercial properties, calculates value based on the income generated by the property, which is not applicable to most residential assessments.