In the sales comparison approach, what is the most critical factor?

In the sales comparison approach, the most critical factor is the selection of comparable properties. This method relies on identifying properties that are similar in characteristics to the subject property being valued. The comparables should closely match aspects such as location, size, age, condition, and amenities. The effectiveness of the sales comparison approach depends largely on how well these comparable properties reflect the market conditions and the value of the subject property.

When comparables are thoughtfully selected, appraisers can draw meaningful conclusions about how much the subject property would sell for in the current market. Conversely, poorly chosen comparables could lead to inaccurate valuations, regardless of how well all other factors are accounted for. Thus, the process of selecting the right comparables is foundational and significantly influences the reliability of the appraisal outcome.