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Business Definition for: market comparison approach
market comparison approach
in real estate, one of three appraisal approaches. The value is estimated by analyzing sales prices of similar properties ( comparables ) sold recently.
See also income approach , cost approachmarket comparison approach
one of 3 appraisal approach . Value is estimated by analyzing sales prices of similar properties ( comparables recently sold.
Example: The subject property is a 3-bedroom, 2-bath house. Two recently sold comparables are found. The appraiser, using the market comparison approach, sets up Table 30.
| TABLE 30 | ||
| MARKET COMPARISON APPROACH | ||
| Subject | Comparable # 1 | Comparable #2 |
| Sale price | $170,500 | $167,000 |
| Date of sale | last week | 3 months ago (+$1,000) |
| 3 bedrooms | 3 bedrooms | 3 bedrooms |
| 2 baths | 2½ baths (--$2,500) | 2 baths |
| Adjusted price | $168,000 | $168,000 |
The subject property is appraised for $168,000.
Copyright © 2007, 2000, 1997, 1987, by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
Copyright © 2004, 2000, 1997, 1993, 1987, 1984 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
Copyright © 2004, 2000, 1997, 1993, 1987, 1984 by Barron's Educational Series, Inc. Reprinted by arrangement with Publisher.
