What is the primary goal of gathering data concerning recent sales in the Market Approach?

The primary goal of gathering data concerning recent sales in the Market Approach is to verify that the sold properties were similar. This is essential because the Market Approach, also known as the Comparable Sales Approach, relies heavily on the principle of substitution. The idea is that a property is worth the price that a typical buyer would be willing to pay for a comparable property in a similar location and condition. By verifying the similarities among sold properties, appraisers can make more accurate comparisons, thereby establishing a reliable estimate of a property’s value.

When appraisers analyze recent sales, they look for properties that share similar characteristics, such as size, location, age, and condition. These verified similarities ensure that the comparisons made are valid and reflect true market behavior, which is critical for an accurate appraisal.

In contrast, while zoning, marketing strategies, and adjustments for expenses are important aspects of real estate, they do not directly relate to the fundamental objective of establishing value through comparable sales data in the Market Approach.