Final answer:
In real estate valuation using the market comparison approach, the process of matching the comparable property's features to that of the subject property for an accurate assessment is known as adjustment.
Step-by-step explanation:
When using the market comparison approach in real estate valuation, the comparable property's relationship to the subject property is a process known as adjustment. This approach is fundamentally a method to compare similar properties and determine the market value of a property (the subject) by assessing recently sold similar properties (the comparables). Interpretation of the data requires adjusting comparable sales to better match the subject property in terms of location, features, and condition.
As part of the adjustment process, various characteristics are considered such as square footage, number of bedrooms, lot size, upgrades, and location. For instance, if the comparable property has one more bedroom than the subject property, the appraiser would adjust the sale price of the comparable property downward to compensate for this difference. Similarly, if the subject property has a newer roof compared to the comparable, the value might be adjusted upward.
Adjustments are critical to align the differences between properties, ensuring that the comparison is fair and accurate. Errors in adjustment can lead to incorrect valuation, affecting real estate transactions significantly. Therefore, professionals in this field need to be meticulous and informed to make appropriate adjustments. Ultimately, this comparison method holds a central position in real estate and is often preferred for its direct reflection of the market conditions.