What is the primary purpose of the sales comparison approach in appraisal?

The primary purpose of the sales comparison approach in appraisal is to estimate property value based on comparable sales. This method involves examining the recent sale prices of similar properties in the same area, which helps appraisers establish a market value for the property being assessed. By analyzing these comparable sales, appraisers can adjust for differences in factors such as size, location, condition, and features, ensuring that the estimated value reflects the current market conditions and trends.

This approach is particularly effective in settings where there is an active market and where similar properties have recently sold. It allows for a more objective determination of value that is directly reflective of what buyers are willing to pay in a real estate transaction, hence grounding the appraisal in actual market practices.