The Sales Comparison Approach relies primarily on what for estimating property value?

The Sales Comparison Approach relies primarily on analyzing recent sales of similar properties to estimate property value. This method is grounded in the principle of substitution, which posits that a buyer will not pay more for a property than the cost of acquiring an equally desirable substitute property. By examining data from comparable sales, appraisers gather evidence that reflects current market conditions and the value that buyers are willing to pay for properties that closely resemble the subject property.

Through this approach, appraisers can adjust for differences between the subject property and the comparables, taking into account factors such as location, size, condition, and features. This ensures that the appraisal reflects the most accurate and relevant market data, making the estimated value both reliable and defensible in the context of real estate transactions.

Other options, such as comparisons of different geographical locations or estimating construction costs, do not provide the same level of market-based evidence specifically for determining property values as the analysis of recently sold similar properties does. Additionally, while property tax assessments can offer insights into value, they are often based on different criteria and may not reflect current market conditions as accurately as recent sales data.