direct sales comparison approach

direct sales comparison approach

Formerly known as the market data approach, this is an appraisal method in which the property being appraised is compared to sales of similar properties in order to arrive at a value.The appraiser identifies the comparable properties as being similar in time and somewhat similar in size, quality, use, and amenities, among other considerations. The appraiser then makes adjustments to the sales price of the comps,based on how they differ from the specific property.

Example:  A home with a three-car garage might be reduced by $25,000 in order to make it comparable to the subject home with a two-car garage. After making the adjustments, the appraiser then reconciles all the comparables to arrive at an opinion of value for the subject property.