Which term best describes a method for determining the estimated costs based on comparable sales?

The term that best describes a method for determining estimated costs based on comparable sales is the sales comparison method. This approach involves analyzing recent sales of similar properties to estimate the value of a subject property. By examining the sales prices of comparable properties, adjustments are made for differences in features, condition, and location to arrive at a fair estimate of value. This method is particularly useful in active real estate markets where sufficient data on comparable sales is available, making it a reliable means of assessing property value based on actual market activity.

Although the market approach encompasses a broader range of valuation techniques and involves the overall concept of valuing a property based on market conditions, the sales comparison method is the specific technique used to derive estimates from comparable sales data. The cost approach focuses on the cost to replace or reproduce a property, while the income methodology is concerned with valuing income-generating properties based on their revenue potential. Thus, while all terms are related to property valuation, the sales comparison method most accurately encapsulates the process of valuing based on comparable sales.