Market Data Approach. This approach, also known as the comparable sales approach, is used when the property being evaluated is similar to and can be compared with other properties that have recently sold in the area. This is the method used for residential properties, and is the only one used for vacant land of any kind. Appraisers locate at least 3comparable sales, then “adjust” the value of those comparable sales to account for various factors. Those factors include a rising or falling market, location, size, time of sale, location, unique property features and amenities, landscaping and other factors. Applying those factors will determine whether the comparable sales should be adjusted upward or downward, indicating a value of the subject property. In the residential context, the result is known as a Comparable Market Analysis (CMA). Next: The Income Approach.
