What is the approach of sales comparison?
Sales Comparison Access is one of the ways to evaluate the value of the property determine the value of the property. This approach is usually used in the sale of residential properties, but can also be used for commercial buildings. Access comparison of sales takes into account the selling price of similar properties located in the same neighborhood or near. The regulations are made for unique functions or legal provisions. These completed sales are usually within a certain time frame, for example, the previous three to six months. The assessment of real estate made in access to the comparison of sales usually consider the completed sale of similar properties. For example, an assessment on an apartment with one bedroom will not consider finished sales for five bedroom houses.
The completed sales are usually pulled from the properties that are located near or inside the same neighborhood. This is due to the fact that the market value may virtually differ from one neighborhood to another, even in the same city. AppreciateReal estate, which is carried out in access to sales comparison, is subject to economic concepts of supply, demand and substitution.
When the properties supply is high and the demand is low, market values tend to decrease. If the supply is low and the demand is high, the same market values will usually be higher. Substitution is the idea that if the price of one type of goods is too high, the potential buyer will find substitute goods with a lower price that meets their needs. For example, if a young couple needs a residence with two bedrooms, it can replace an apartment with two bedrooms, which is less than two bedrooms separate house.
Unique features of properties may require Adjustments when using access to sales. Factors such as the main improvements, current appliances, certain types of windows and doors, floor layout and total property condition may haveObvious rating value that is higher or lower than the market average. For example, if an apartment with one bedroom is the only property within 5 miles (8 km), which has a fireplace, its value is likely to be slightly higher than the completed sale on similar residences. Likewise, if the total state of property is bad compared to others in the same area, its estimated value will certainly be lower than the average.