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Valuation & Appraisal

Sales Comparison Approach

Valuation method based on recent sales of comparable properties. Used alongside the income approach.

Full Definition

The sales comparison (or market) approach values property based on recent sales of comparable properties. Appraisers adjust comps for differences (size, age, condition, location). Most commercial appraisals use both income and sales comparison approaches and reconcile to a final value.

Related Terms

Income Approach (to Valuation)

Valuation method based on applying a cap rate to NOI. The primary approach for income-producing commercial real estate.

Cost Approach

Valuation method based on replacement cost minus depreciation. Useful for special-purpose properties without direct comparables.

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