market data approach

market data approach

A former term for the direct sales comparison method of appraisal.
References in periodicals archive ?
The three approaches are: The market data approach, the cost approach and the income method.
The market data approach is based on comparable sales.
I believe the market data approach should be used extremely carefully by investment property buyers since every investment property has his own story and potential and it is too simplistic to compare it to other properties in terms of price per square foot, price per unit, or price per Room.
The market data approach is generally more reliable for residential properties whereas investment properties analysts and appraisers should rely more extensively on the income capitalization approach.
Therefore, over the past few years, people combined the income capitalization approach and the market data approach, by comparing not only Price per Square Foot but also cap rates and GRM.
For example, in some cases, a commercial landfill can be valued using the market data approach and no other.
Ultimately, the Supreme Court has expressed a strong preference for the market data approach to valuation in condemnation cases while allowing courts the flexibility to utilize other valuation methods when necessitated by particular circumstances.
As will be seen, from a legal standpoint, a special use property falls into the Supreme Court's rubric as property for which "market value has been too difficult to find," or for which the application of the market data approach "would result in manifest injustice to owner.
Because the financial stakes can be substantial when property is valued using a method other than the market data approach, the government and owner will often fight over whether sales of particular properties are similar enough in time, location, or use to be considered "comparable.
Once an owner has passed the hurdle of proving that the property at issue is a special use property, a court may accept one of three valuation methods: the cost approach, the income approach, and the modified market data approach.
These properties fill into the Supreme Court's Fifth Amendment jurisprudence as those for which the market data approach is either impracticable or unfair.