What does a large total adjustment needed for a comparable property indicate when using the sales comparison approach?

When using the sales comparison approach, a large total adjustment needed for a comparable property indicates that the property may not be a reliable comparable for the subject property. This method relies on finding properties that are similar in characteristics, such as size, location, and condition, to make valid comparisons in value.

A substantial adjustment suggests significant differences between the comparable property and the subject property, which can undermine the accuracy of the appraisal. If adjustments are extensive, it usually means that the comparable property has many characteristics that do not align closely with the subject property, indicating that it might not truly reflect the market value of the subject. Therefore, using such a property as a basis for comparison could result in a misleading estimate of value for the property being appraised.

Reliable comparables should show minimal adjustments, reflecting closer similarities, which lead to a more accurate assessment of value. In contrast, large adjustments can signal that the comparable is not suitable for the analysis.