In the Sales Comparison Approach, what factors are evaluated for property valuation?

In the Sales Comparison Approach, property valuation hinges on the analysis of sale prices of comparable properties along with their conditions. This approach is grounded in the principle of substitution, which states that a property’s value is determined in part by the prices of similar properties that have been sold recently in the same area.

By evaluating the sale prices of comparable properties, appraisers can establish a baseline for estimating the value of the subject property. The conditions of these comparables, including aspects such as age, maintenance, and any renovations or updates, are also crucial because they directly affect the desirability and marketability of the property being appraised. Adjustments may be made to account for differences in conditions between the subject property and the comparables to arrive at a more accurate valuation.

Other options focus on isolated aspects such as the age and maintenance of the property, the number of rooms and landscaping features, or the original cost of purchasing the property. While these factors can have some influence on property value, they do not encompass the comprehensive comparative analysis required in the Sales Comparison Approach, which relies on actual market data to inform the valuation process.