What does the Sales Comparison Approach primarily analyze?

The Sales Comparison Approach primarily analyzes the sale prices of similar properties. This method is fundamental within real estate appraisal because it relies on comparing the subject property with recently sold comparable properties, sometimes referred to as "comps." By examining these sales, appraisers can determine a fair market value for the property in question, adjusting for differences in features, location, and condition.

Using the sale prices of similar properties provides a real-world basis for establishing value, as it reflects what buyers in the current market are willing to pay. This approach is particularly useful in residential property appraisals, where active markets with numerous similar transactions exist. The accuracy of the Sales Comparison Approach hinges on selecting relevant and comparable properties, ensuring that adjustments align with market conditions.

While other options may involve analyzing important factors in property evaluation, such as historical trends or income potential, they do not specifically focus on the comparison of sale prices, which is the core function of the Sales Comparison Approach.