What would an appraisal using the sales comparison approach involve?

An appraisal using the sales comparison approach primarily involves comparing the property being appraised to similar properties that have recently sold in the same area. This method is grounded in the principle of substitution, which posits that a buyer will not pay more for a property than they would for a comparable one.

To conduct a proper sales comparison appraisal, an appraiser looks for properties that are similar in key aspects such as location, size, condition, and amenities. By analyzing the sale prices of these comparable properties, the appraiser can make adjustments for differences and derive a value estimate for the subject property. This approach is particularly effective in market conditions where sufficient comparable sales data exists, making it a commonly used method for residential properties.

The other options describe different appraisal approaches that are not typical of the sales comparison method. Evaluating the cost of construction and materials pertains to the cost approach, assessing future income potential relates to the income approach, and calculating the cost to replace the property also corresponds to the cost approach, which focuses on estimating the cost to construct a similar property at current prices.