Question

In the sales comparison approach to value, the probable sales price of a building may be estimated by:

a) Analyzing construction costs
b) Comparing it to similar properties
c) Projecting future income
d) Assessing depreciation

Answer 1

To estimate the probable sales price of a building using the sales comparison approach, you compare it to similar properties and adjust for differences.

Step-by-step explanation:

In the sales comparison approach to value, the probable sales price of a building may be estimated by comparing it to similar properties. This approach involves examining the sales of comparable properties that have recently been sold in the same or similar market. This method is preferred as it provides a market-based context to assess the value of a property, offering a more direct reflection of what the market is willing to pay. Considerations in this comparison usually include location, size, condition, and features among others, adjusting for differences to ascertain an accurate sales price.