When is the sales comparison approach most effective?

• A. When sufficient market data is available to extract and support adjustments
• B. When forced to use only a single sale
• C. When the subject has unique features
• D. When there are many similar properties all around

Answer: (A)

The sales comparison approach works best when there is enough market data from multiple comparable sales to extract and justify adjustments for differences between those sold properties and the subject. Having solid, observable transactions lets you quantify how changes in size, condition, location, functionality, and amenities affect value, making the final estimate credible and defensible.

This is why that option is correct: with a robust set of comparables and documented adjustments, you can structure a reasoned, market-based value conclusion rather than relying on guesswork. If you only have one sale, there’s no market sample to support adjustments. If the subject has unique features not reflected in the comps, it’s hard to isolate their value impact without appropriate, apples-to-apples data. Even with many similar properties nearby, the usefulness of the approach ultimately hinges on having sufficient market data to back up the adjustments.