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Pass California

Valuation and Analysis, 14% of the examination

Sales comparison approach

A valuation method comparing the subject with recent similar sales and adjusting the comparables for material differences.

Also called: Market data approach

Adjust the comparable, not the subject: subtract for a feature the comparable has and the subject lacks, and add when the comparable lacks a feature the subject has. The method is strongest when enough recent, arm's-length, genuinely comparable sales exist.

See also

Principle of substitutionThe maximum value of a property tends to be set by the cost of acquiring an equally desirable substitute.ReconciliationThe appraiser's reasoned weighting of applicable value indications into a final opinion of value.

Test the distinction

A relevant question from Valuation and Analysis, selected because its facts or explanation use this concept.

Valuation and Analysis ยท 14%Methods of Estimating Value

An appraiser values a 40-year-old single-family home in an established neighborhood with many recent sales. Which approach carries the most weight?

Written to DRE's published topic list. Not a real examination question, since reproducing those is a misdemeanor under B&P Code section 123.

Primary sources

Use these authorities when a course summary, forum answer, or older flashcard conflicts with the current California rule.

Where this is tested

Property Valuation and Financial AnalysisAll three official DRE valuation topics in one practical guide: value principles, the sales comparison, cost and income approaches, and the financial analysis that turns property data into a defensible answer.14%Practice Valuation and Analysis28 questions on this area, every option explained.Practice

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