Which approach uses market data from comparable sales?

Which approach uses market data from comparable sales?

• A. Cost Approach
• B. Replacement Cost Approach
• C. Income Capitalization Approach
• D. Sales Comparison Approach

Answer: (D)

This question tests how value is derived from actual market evidence of similar properties. The approach that uses market data from comparable sales is the Sales Comparison Approach. It relies on recent sales of properties similar to the subject property (comps) and adjusts for differences in location, size, condition, features, and amenities to estimate what the subject would likely sell for in the current market. This reflects how buyers view value based on what similar properties have sold for. The other methods focus on costs to build or replace the property or on its income potential, not on comparing actual market transactions.

This question tests how value is derived from actual market evidence of similar properties. The approach that uses market data from comparable sales is the Sales Comparison Approach. It relies on recent sales of properties similar to the subject property (comps) and adjusts for differences in location, size, condition, features, and amenities to estimate what the subject would likely sell for in the current market. This reflects how buyers view value based on what similar properties have sold for. The other methods focus on costs to build or replace the property or on its income potential, not on comparing actual market transactions.