Sales Comparison Approach in Appraisal

In this video, Paul Vachesky introduces the sales comparison approach to property appraisal, also known as the market data approach. He explains how this method uses comparable properties to determine the value of a subject property, focusing on residential properties and vacant land. The video details the process of making adjustments to comparables based on features like bedrooms, garages, and amenities, and emphasizes the importance of selecting the most similar comparables. The video concludes with a brief mention of the next topic, the cost approach to value.

What is the primary purpose of the sales comparison approach in real estate appraisal?

• To calculate the income potential of a property

• To estimate the value of a property by comparing it with similar properties

• To determine the cost of building a new property

• To assess the historical significance of a property

Which type of properties is the sales comparison approach typically used for?

• Industrial properties

• Agricultural properties

• Commercial properties

• Residential properties and vacant land

How many comparables are typically used in the sales comparison approach?

• Three

• Two

• Four

• One

What is the purpose of making adjustments to comparables in the sales comparison approach?

• To account for differences between the subject property and comparables

• To make the subject property look more appealing

• To increase the value of the comparables

• To decrease the value of the subject property

If a comparable property has more bedrooms than the subject property, what adjustment is made?

• Add value to the subject property

• Subtract value from the comparable

• Add value to the comparable

• No adjustment is needed

How is the value of a garage space typically determined in the sales comparison approach?

• By the size of the garage

• By the number of cars it can hold

• By a standard value set by local appraisers

• By the age of the garage

What adjustment is made if a comparable property is on an above-average lot?

• Add value to the comparable

• Add value to the subject property

• No adjustment is needed

• Subtract value from the comparable

What is the final step in determining the appraised value using the sales comparison approach?

• Using the lowest adjusted sale price

• Using the highest adjusted sale price

• Selecting the most similar comparable and basing the value on it

• Averaging the adjusted sale prices of all comparables

Why is it important to select the most similar comparable in the sales comparison approach?

• To make the appraisal process faster

• To increase the value of the subject property

• To decrease the value of the comparables

• To ensure the appraisal is as accurate as possible

What is the role of an appraiser's professional opinion in the sales comparison approach?

• It is used to set the market price

• It is the only factor in determining property value

• It provides a subjective estimate of value

• It is not considered in the final valuation