How are properties appraised in sale comparison appraisal technique?
Appraisers in New York usually follow the sale comparison approach to determine the market worth of a property. In this appraisal method, the appraiser takes recently sold properties into consideration. For the purposes, relevant region is ascertained. That is, an area surrounding the property in question is marked out and recent sales in this demarcated geography are then analyzed by the New York appraiser.
There is no fixed rule is respect to this demarcation. Often, while conducting appraisals, appraisers face a situation where they are unable to identify a reasonable number of sold projects in the chosen vicinity. Thus, to reach upon more specific estimates, adjustments are made and more properties are included. The idea is to enable a comprehensive comparison.
To further enable extensive survey and thus a complete analysis, as per requirement, time adjustments are also made. Basically, the sale comparison appraisal technique relies upon the data collated and thus, New York appraisers make all possible efforts to derive results from a broad data collection. So if it is needed, appraisers not only consider the properties that have been recently sold, but they also include sales completed in last few years.
Typically, the properties are compared based upon facets like floor area, number of rooms and bathrooms, age and condition of the property in question, proximity to amenities, etc. The logic behind this appraisal technique is pretty simple. If you could buy a property for say $ X, you wouldn’t be willing to pay $ X + 1, for a similar property; until of course, this property provides you something extra, say it is near to a hospital or instead of 2 it has 3 bathrooms. Thus, the substitution cost is being worked out.