In the direct comparison approach, which factor among adjusted comparables is commonly used?

In the direct comparison approach, which factor among adjusted comparables is commonly used?

• A. The most recent sale
• B. The sale with the lowest total dollar adjustment
• C. The sale with the fewest adjustment
• D. The sale with the highest price per square foot

Answer: (A)

In the direct comparison approach, you estimate value by looking at sale prices of comparable properties and adjusting those prices for differences in features, location, and timing. Among adjusted comparables, using the most recent sale is common because it best reflects current market conditions. Market conditions—demand, financing terms, pricing trends—change over time, so a sale that closed recently provides a more relevant benchmark for today’s value. Older sales require larger time adjustments to approximate current conditions, which adds uncertainty. Focusing on the most recent sale helps anchor the estimate in today’s market reality, with adjustments made for specific differences between properties.

In the direct comparison approach, you estimate value by looking at sale prices of comparable properties and adjusting those prices for differences in features, location, and timing. Among adjusted comparables, using the most recent sale is common because it best reflects current market conditions. Market conditions—demand, financing terms, pricing trends—change over time, so a sale that closed recently provides a more relevant benchmark for today’s value. Older sales require larger time adjustments to approximate current conditions, which adds uncertainty. Focusing on the most recent sale helps anchor the estimate in today’s market reality, with adjustments made for specific differences between properties.