The Sales Comparison Approach Objectives We introduce the sales comparison approach 8.1 Introducing the Sales Comparison Approach 8.2 Collecting Comparable Sales Data 8.3 Data Resources on the Internet 8.4 Appraisal Statistical Concepts 9.1 Basic Methods of Comparing Sales 9.2 Selecting and Using Units of Comparison 9.3 How to Estimate Dollar and Percent Adjustments 9.4 Arriving at an Indicated Value 8.1 INTRODUCING THE SALES COMPARISON APPROACHThe sales comparison approach is the most important of the value approaches. Outline of the Sales Comparison Approach1. Collect recent sales of properties comparable to the subject property. 2. Analyze these sales and compare them with the subject property. 3. Adjust for the differences between the sales and the subject property. 4. Arrive at a value estimate as indicated by the adjusted sales. Key Concepts of the Sales Comparison ApproachThe Importance of Substitution 1. The sales comparison approach is based on the principle of substitution. 2. This process is commonly used by buyers and sellers. Simplicity The sales comparison approach is simple because it: 1. Is the most direct approach. 2.Requires fewer calculations. 3. Is most understandable. 4. Is easier to explain. Statistical Connections The sales comparison approach is related to statistics because it: 1. Uses a samplingof market activities. 2. Identifies market patterns. 3. Uses a bracketingtechnique to indicate the range of value. 4. Can be used to indicate the most probableselling price. Adjustments The sales comparison approach offers sales analysis and adjustment methods that can: 1. Help identify the property features that are affecting the selling price. 2. Suggest how much to adjust the price(s). 3. Allow an objective review of the appraisal.
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