What does it mean when property values are compared to "comparable sales”?

When property values are compared to "comparable sales," it specifically means that the evaluation references similar properties that have been recently sold. This approach is essential in real estate appraisal because it allows appraisers to establish a fair and accurate market value for a property by looking at the price at which similar homes or properties in the same area have sold. These comparable sales are used as benchmarks to determine what buyers are willing to pay for a property with similar characteristics, such as size, location, condition, and age.

Utilizing comparable sales ensures that the appraisal reflects current market conditions and trends, making it a reliable and widely accepted method in the real estate industry. By analyzing these recent transactions, appraisers can adjust the value based on specific features or differences in the properties being compared.