For what purpose does an appraiser use sales data on comparable properties?

An appraiser uses sales data on comparable properties primarily for the sales comparison approach. This method involves evaluating similar properties that have recently sold in the same market area to determine a fair market value for the property being appraised. By analyzing the sale prices of these comparable properties, the appraiser can make adjustments based on differences, such as size, condition, and amenities. This approach relies heavily on real market transactions to provide an accurate estimate of value, making it highly relevant in residential appraisals.

While general data on geographic and economic features of the neighborhood is useful for contextualizing the property value, it does not directly utilize specific sales data for value estimation. The cost and income approaches, although valid, rely on different methodologies that may involve replacement costs or income generation potential rather than just comparing recent sales. Thus, in the context of appraising properties, especially in residential scenarios, the sales comparison approach is the most applicable, leveraging sales data for a reliable assessment.