In real estate appraisal, what does the term "comparable" mean?

In real estate appraisal, the term "comparable" refers to properties that share similar characteristics and are located in close proximity to each other. This is crucial because appraisers rely on comparables to determine the market value of a property being appraised. When properties are alike in attributes such as size, age, style, condition, and location, they provide a reliable basis for comparison. This helps in assessing how much a property is worth based on what similar properties have sold for recently.

Using comparables allows appraisers to make informed adjustments to the value for any differences, thereby arriving at a more accurate appraisal. This method ensures that the appraisal reflects the current market conditions, as the value of properties can vary significantly based on their features and locality.

Properties that are unique or dissimilar, located far away, or have different zoning classifications do not serve well as comparables because they do not provide relevant or comparable data to inform the appraisal process effectively.