In the sales comparison approach, what is typically adjusted?

In the sales comparison approach, adjustments are typically made to the comparable sales to reflect differences between those comparables and the subject property. The goal of these adjustments is to ensure that the comparables accurately represent the market value of the subject property by accounting for variations in characteristics such as size, condition, location, and amenities.

When appraisers compare a subject property to recently sold properties that are similar, they need to quantify how these differences affect value. For instance, if the subject property has a larger square footage or a more updated kitchen than a comparable sale, the appraiser will adjust the sale price of the comparable downward to reflect its lower value in comparison to the subject property. Conversely, if a comparable has features that the subject lacks, such as a swimming pool or a finished basement, the appraiser would increase the adjusted value of the comparable.

This process is essential to ensure that the final estimate of value for the subject property is as accurate as possible, reflecting current market conditions and the specific attributes of the properties being analyzed. By making adjustments to the comparables rather than the subject property, the appraiser maintains a consistent and reliable basis for comparison.