What is the market comparison approach to value?
The market or direct sales comparison approach to an estimate of value compares market data, prices paid for similar properties, prices asked by owners and offers made by prospective purchasers. These sales are listed in the comparison grid on page 2 of the 1004 Single Family Uniform Residential Appraisal Report (URAR). Adjustments are made to each of the comparable sales used for major differences between the comparable and the subject property. These adjustments may address such items as location, gross living area, lot size, condition, age, market conditions, degree of updating, construction quality and significant amenities, i.e.: fireplace, deck, patio, porch. In the market approach, the appraiser must gauge and reflect the anticipated reaction by a typical buyer to differences between the subject property and the comparable sales.
