Which approach focuses on estimating property value through comparisons to similar properties?

The Sales Comparison Approach focuses on estimating property value by comparing the subject property to similar properties that have recently sold in the same area. This method relies on the premise that a buyer would not pay more for a property than the cost of purchasing an equivalent property with similar characteristics and features.

In this approach, appraisers look at recent sales data from comparable properties, adjusting for differences in size, location, amenities, and condition to arrive at a fair market value. This makes it particularly effective in residential real estate, where active and recent sales data can provide a reliable benchmark for property value.

The other approaches serve different purposes: the Cost Approach estimates value based on the cost to recreate the property minus depreciation, while the Income Approach focuses on the potential income a property can generate, making them less relevant for the specific task of estimating value through comparisons to similar properties. The Market Analysis Approach could encompass elements of the Sales Comparison Approach but is typically broader and might include economic trends and other market factors beyond just comparable sales.