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What is the primary reason for analyzing sales history of the subject and comparable sales?

a. Determine that flipping actions have not occurred
b. Apply a standard percentage to the prior sale amount to arrive at a current value estimate
c. Document all sales of the property
d. Find out who the previous owners were

1 Answer

5 votes

Final answer:

The primary reason for analyzing the sales history of the subject and comparable sales is to establish an accurate valuation of a property by understanding market trends and setting a competitive price.

Step-by-step explanation:

The primary reason for analyzing sales history of the subject and comparable sales is to establish an accurate valuation of a property. When analyzing sales history, the aim is not specifically to determine past ownership details (d) or to ensure that flipping actions have not occurred (a). It's also not simply about applying a standard percentage to the prior sale amount to arrive at a current value estimate (b) or just documenting all sales of the property (c). Rather, the analysis is focused on understanding the market trends, such as what prices similar properties have sold for and how these sales reflect the current market conditions. This analysis often includes calculating the median sale price and understanding the variation in prices, which can be critical for setting a competitive sale price or making an informed purchase offer.