In the sales comparison approach, which concept is used to adjust the sale prices of comparables to reflect differences with the subject?

• A. It is used to model market rents
• B. Elements of comparison
• C. Capitalization rates
• D. Replacement cost

Answer: (B)

Adjustments in the sales comparison approach are made using the elements of comparison. When you compare a subject property to similar sold properties, you identify differences in factors such as location, physical characteristics (size, condition, quality), and terms or date of sale. You adjust the price of each comparable to account for these differences, bringing them in line with what the subject would likely command under similar conditions. This ensures the adjusted prices reflect a consistent basis for comparison and yields a credible value indication. The other options relate to different appraisal approaches: modeling market rents is for the income approach, capitalization rates are used in converting income to value, and replacement cost pertains to the cost approach.