NVI Technical College Information

S ALES C OMPARISON A PPROACH 50

S ALES C OMPARISON A PPROACH

M ETHODOLOGY In the Sales Comparison Approach, we developed an opinion of value by comparing similar, recently sold properties in the surrounding or competing area to the subject property. In order to determine the value of the subject property, these comparable sales and/or listings are then evaluated and adjusted based on their differences when compared to the subject property. Inherent in this approach is the principle of substitution, which states that when a property is replaceable in the market, its value tends to be set at the cost of acquiring an equally desirable substitute property, assuming that no costly delay is encountered in making the substitution.

The Sales Comparison Approach to value requires the following sequential steps:

Unit of Comparison

A unit of comparison (i.e. price per square foot, price per dwelling unit) must be selected for comparable analysis of the sales and the subject. The selected unit of comparison must be consistent with market behavior. Research must be done to locate comparable sales, listings and contracts of properties that are similar to the subject. Similarities may include property type, size, physical condition, location and the date of the sale. All sales must be confirmed to verify that the data used is accurate, and that all of the sales, listings or contracts represent arm’s-length transactions. Each of the improved sales that is chosen for this valuation is considered generally similar to the subject. Therefore, each difference between the comparables and the subject must be identified, and then adjusted for the various differences. All adjustments are made to the comparables as they relate to the subject property. Once the comparables have been adjusted, a value must be concluded based on the indications produced from the analysis of the comparables.

Search for Sales

Confirmation

Comparison

Reconciliation

U NITS OF C OMPARISON Based on market behavior observed, the most appropriate unit of comparison for this analysis is price per square foot. C OMPARABLE I MPROVED S ALES On the following pages, we present a summary of the improved properties that we compared to the subject property, a map showing their locations, and the adjustment process. Due to the lack of sales in the immediate Blairsville area, the appraiser had to expand the search to include the Pittsburgh metro area.

F OUR B UILDING I NDUSTRIAL C OMPLEX A PPRAISAL

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