Final answer:
In the sales comparison approach, an appraiser selects comparables, makes adjustments to reflect differences from the subject property, then synthesizes this information typically through weighting.
Step-by-step explanation:
To complete the sales comparison approach, an appraiser typically uses a process involving several steps. The first step is to select comparables, which are properties similar to the subject property in size, location, and features.
Once comparables have been selected, the appraiser makes adjustments to the values of the comparables to account for any differences between them and the subject property. This may involve weighting the comparables based on their relevance and the degree of similarity to the subject property.
The final value of the subject property is then determined by synthesizing the adjusted values of the comparables, which might include averaging the values or considering the comparables in another manner, but it is not as simple as identifying the subject's value as that of the middle value or the nearest comparable.
The concept of averaging comparable values may seem akin to calculating the mean rent of a two-bedroom apartment by averaging listed rents from a newspaper, or determining the true proportion of successful basketball shots.
However, in the context of property appraisal, it is a more nuanced process, taking into account the individual characteristics and adjustments for comparables.
The goal is to arrive at a fair market value for the subject property that reflects its unique attributes.
The reasonableness of the solution should always be verified by examining the magnitude, direction, and units of the answer. Experience and knowledge in property appraisal will enhance an appraiser's ability to make these judgments.