Appraisal Report: Sales Approach

The second Appraisal Report valuation approach that will be discussed here is the Sales Approach, which is based upon the idea that an individual and/or investor would not pay more for a certain asset based on comparable offerings.

The sales approach understands that a buyer is looking to pay the least cost for a property or asset that meets both his/her wants and needs.  Hence the appraiser will seek to compare similar properties to the focused property of the appraisal report to determine if the price is in agreement with market factors.

To complete the sales approach, the appraiser will compile information on properties or assets recently sold which are comparable to the subject of the appraisal.  Being that no two assets are ever the same, certain adjustments are made to ensure each comparable is similar to the subject.

Upon adjustments, the single value indication is determined, such as price per square foot for the comparables.  That value is then applied to the subject to determine the price the buyer should be willing to pay.

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Capital Corp Merchant Banking, Inc.