In the application of the sales comparison approach, adjustments are based on what?

In the sales comparison approach, adjustments are made based on the market reflection of observed differences among comparable properties. This means that appraisers analyze how various characteristics of properties, such as size, location, condition, and features, affect their respective market values. By identifying discrepancies between the subject property and the comparable properties, appraisers adjust the sale prices of those comparables to account for these differences.

Adjustments reflect how the market perceives the value of certain features—whether they enhance or diminish a property's worth. For example, if a comparable property has a swimming pool and the subject property does not, the appraiser will determine how much that pool increases the market value of the comparable property, making necessary adjustments to establish an accurate comparison. This method hinges on actual market data and the perceived value differences, resulting in more precise property valuations.

The other options, while relevant to the appraisal process in general, do not specifically address the mechanism of adjustments in the sales comparison approach. For example, market trends can inform the overall context of property values but are not the direct basis for individual adjustments. Similarly, the sales prices of similar properties serve as the foundation for comparison but do not inherently dictate the appropriate adjustments without considering the specific differences in value reflected by the