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Which of the following is an example of the sales comparison approach?

Rationale

The subject property has a pool and the comp doesn't, so the appraiser adds $20,000 to the comp value.

The sales comparison approach involves comparing the subject property to similar properties (comps) that have recently sold, adjusting their values based on differences. In this case, the appraiser adds value for the pool, reflecting how such features impact market price.

A ($15,000 in operating expenses is subtracted from the EGI of a building.) YOUR ANSWER

This choice describes an adjustment made to calculate net operating income rather than a comparison to similar properties. The sales comparison approach focuses on market values derived from comparable sales, not on operational expenses, which are typically addressed in the income approach.

B (The economic life of a building is 60 years, and the appraiser finds the building has a 20% depreciation rate.) YOUR ANSWER

While this statement presents information about depreciation, it does not involve comparing the subject property to others in the market. Instead, it refers to the cost approach in valuation, which assesses the value based on replacement costs minus depreciation.

D (The uniform percentage of the area is 50%, so the market value is halved.) YOUR ANSWER

This option suggests a generic adjustment based on area size rather than a direct comparison to similar properties. Sales comparison relies on specific property features and market transactions, not a uniform percentage reduction, which oversimplifies the valuation process.

Conclusion

The sales comparison approach is fundamentally about adjusting the sale prices of comparable properties to reflect differences with the subject property. Choice C illustrates this concept well by adjusting the comp's value based on the presence of a pool, a tangible feature that can significantly influence market prices. Other options either relate to different valuation methods or do not involve comparisons, highlighting the unique applicability of the sales comparison approach in real estate appraisal.

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