In the Comparable Sales Approach, which is primarily used to assess property value?

In the Comparable Sales Approach, the primary focus is on recent sales of comparable properties. This method involves analyzing sales data of properties that are similar in size, location, age, and features to the property being appraised. The rationale is that properties in a given market tend to sell for similar prices when they possess comparable attributes. By examining these recent sales, appraisers can determine a fair market value for the subject property based on what buyers are willing to pay for similar homes.

The effectiveness of this approach lies in its reliance on actual market transactions, which provides a realistic reflection of property values in a specific area. The comparisons help to establish a price range for the property being evaluated, ensuring that valuation is grounded in the current market conditions.

Other options, such as recent sales of multiple properties, focus too broadly without ensuring that the properties compared are similar enough to yield a meaningful valuation. Meanwhile, rental income and cash flow analysis are critical in investment contexts but do not specifically assess property value in the same way that comparable sales do; these methods focus on the income potential of the property rather than its market value based on sales data.