In the sales comparison approach, what does adjustment refer to?

Adjustment in the sales comparison approach is crucial for ensuring that the appraiser can accurately determine the value of the subject property by comparing it to similar properties that have recently sold. When using the sales comparison approach, appraisers need to account for the differences between the subject property and the comparables. These differences may include variations in location, size, condition, age, and any unique features that may have affected the sale price.

By making adjustments to the sale prices of comparable properties, appraisers can better reflect the market value of the subject property. For example, if a comparable property has a larger square footage than the subject property, the appraiser would adjust the sale price of that comparable downwards to account for the size discrepancy. Conversely, if the comparable has a less desirable feature, its price would be adjusted upwards. This meticulous process allows the appraiser to arrive at a more accurate and fair market value that incorporates all relevant differences in property characteristics.

In contrast, other choices might imply different processes or goals that are not aligned with the fundamental purpose of adjustments in the sales comparison approach. Standardizing property evaluations or discussing zoning regulations does not directly relate to the adjustment process that ensures appropriate comparisons are made between properties.