"Sales Comparison Approach in Real Estate Appraisal"

From James Kimmons,
Your Guide to Real Estate Business.

Definition:

The Sales Comparison Approach compares recently-sold local similar properties to the subject property. Price adjustments are made for differences in the comparable and subject property.

Examples:

A simple example would be a home (Home A) with 3 bedrooms,2 baths and no garage. If we want to estimate it's value to a comparable home just sold:

1. Comparable Home B sold recently for $150,000. It also had 3 bedrooms and 2 baths. but has a 2 car garage. The garage is valued at $4000.

2. We subtract the $4000 from the value to arrive at a comparable value of $146,000 for our subject Home B.