Which approach uses recent comparable sales to estimate value?

• A. Replacement approach
• B. Cost approach
• C. Sales comparison (market data) approach
• D. Income capitalization approach

Answer: (C)

Using recent comparable sales to estimate value relies on market evidence of what buyers have recently paid for similar properties. By choosing homes that closely match the subject in size, condition, and location, and adjusting for any differences, you translate observed sale prices into an approximate value for the subject property. This approach captures current market conditions and buyer preferences, making the estimate grounded in actual transactions. The replacement or cost approach, in contrast, bases value on how much it would cost to construct a comparable property today, not on what buyers recently paid. The income capitalization approach derives value from the property’s potential to generate income rather than from sale prices of similar properties.