Which approach to appraisal can be used to assess the value based on historical sales of similar properties?

The Sales Comparison Approach is a method used in property appraisal that assesses the value of a property based on the sale prices of similar properties in the same area. This approach relies on the principle of substitution, which posits that a buyer will not pay more for a property than the cost of acquiring an equally desirable substitute property.

By analyzing recent sales of comparable properties, appraisers can establish a range of values that can inform the market value of the property in question. This method is especially effective in active markets where there are sufficient comparable transactions, enabling appraisers to adjust prices based on differences in features, location, and condition among the properties being compared. It's widely used for residential property appraisals because it reflects current market conditions and buyer preferences.

In contrast, the other options serve different purposes. The Cost Approach calculates value based on the cost to replace or reproduce a property, factoring in depreciation. The Income Approach, often used for investment properties, estimates value based on the income generated from the property. The Market Analysis Approach, while related to examining market trends, does not specifically focus on comparable sales in the way the Sales Comparison Approach does. Therefore, the correct choice aligns directly with assessing property values through historical sales data.