What is the main focus of the sales comparison approach in appraisal?

The main focus of the sales comparison approach in appraisal is to identify features of the subject property that are in demand. This approach relies on comparing the subject property with similar properties that have recently sold in the same area. By analyzing the sale prices of these comparable properties, appraisers can determine a fair market value for the subject property based on its characteristics.

This method emphasizes understanding what features buyers are valuing in the current market, which can include aspects such as the size, location, condition, and amenities of the property. This market-driven approach ensures that the appraisal is relevant to current buyer preferences and market trends, making it a crucial tool in determining property value.

In contrast, historical property values, while potentially useful, do not capture current market dynamics and demand. Estimating cost for new construction focuses on the expenses involved in building new structures, which is outside the scope of the sales comparison approach. Additionally, while income potential can be an important aspect for certain types of appraisals, such as those involving investment properties, it is not the focus of the sales comparison approach, which centers on recent sales data rather than income generation.