What is the first step in applying the sales comparison approach?

The first step in applying the sales comparison approach is to research the market for similar properties. This foundational step involves gathering data about recently sold properties that are comparable to the subject property in terms of location, size, condition, and features. By analyzing similar properties, a consultant can establish a baseline for what buyers are willing to pay in the current market.

Researching the market sets the stage for the entire valuation process. It helps the consultant identify trends, pricing, and factors that influence property values. Without a comprehensive understanding of the market context, subsequent steps, such as verifying sale information or selecting relevant units of comparison, may not yield accurate or meaningful results. Essentially, a thorough market analysis creates the framework necessary for valuation and serves as the basis for comparing the subject property to others.