Question 11

Comparable properties should be similar to the subject property in location, style, and amenities.

In the sales comparison approach, it is essential that comparable properties share similarities with the subject property in terms of location, style, and amenities to ensure an accurate valuation. This alignment helps to reflect the market conditions and buyer preferences accurately.

A) original cost to build

While the original cost to build can influence property value, it is not a primary factor for comparables in the sales comparison approach. Market perceptions and buyer interest are more closely tied to the property's characteristics rather than the initial construction cost.

B) replacement cost to build

Replacement cost relates to how much it would cost to rebuild the property today, which is not directly relevant for comparing sales prices. The sales comparison approach focuses on the market value derived from similar properties rather than the cost to replace them.

C) location, style, and amenities

This option is correct as it emphasizes the importance of selecting comparable properties that share key characteristics with the subject property. Similarities in location, style, and amenities directly impact market value and buyer appeal, making them crucial for accurate comparisons.

D) assessed value and tax rate

Assessed value and tax rates are administrative measures and do not necessarily reflect the market value of a property. These factors can vary widely and are not reliable indicators for selecting comparable properties in the sales comparison approach.

Conclusion

The correct answer, option C, highlights the critical aspects of the sales comparison approach by focusing on the importance of matching location, style, and amenities among comparable properties. Options A, B, and D fail to address the essential characteristics required for accurate market comparison, which ultimately determines a property's value in the sales context.