Why are adjustments made to comparables in the sales comparison approach?

Adjustments are made to comparables in the sales comparison approach to account for differences and arrive at a more accurate estimated value. In this approach, appraisers compare the subject property to similar properties (comparables) that have recently sold in the market. However, it's essential to recognize that no two properties are identical. Variations may exist in terms of features, location, size, condition, and other relevant characteristics.

By making adjustments, appraisers quantify these differences, either increasing or decreasing the value of the comparables as needed. This process ensures that the appraiser arrives at a value that reflects the true market conditions and the specific attributes of the subject property. The goal is to ensure the final value estimate is as precise as possible, ultimately leading to a more reliable appraisal.

Other considerations, such as standardization of properties or legal requirements, do not fundamentally drive the necessity for adjustments in this context. The primary focus is on achieving accuracy in the estimated value by thoroughly evaluating how comparable sales differ from the subject property.