What is the second step in applying the direct comparison approach?

What is the second step in applying the direct comparison approach?

• A. Gathering all comparable sales, listings, offers and rental locations, and check pertinent information on each.
• B. Compare each sale to the subject property.
• C. Analyze the data regarding differences in time of sale and other factors.
• D. Correlate the data and make preliminary value estimate.

Answer: (C)

In the direct comparison approach, after you’ve gathered a solid set of comparable sales and listings, the next step is to analyze how the differences between those comparables and the subject property affect value, including how time of sale and other factors influence price. This analysis helps you understand which adjustments will be needed and why, so you can translate the raw comp data into meaningful adjustments before forming a value estimate. The act of directly comparing each sale to the subject is part of this overall analysis, but the crucial move right after data collection is to scrutinize the differences and how they impact value. Once you’ve understood these differences, you then correlate the data and derive a preliminary value estimate.

In the direct comparison approach, after you’ve gathered a solid set of comparable sales and listings, the next step is to analyze how the differences between those comparables and the subject property affect value, including how time of sale and other factors influence price. This analysis helps you understand which adjustments will be needed and why, so you can translate the raw comp data into meaningful adjustments before forming a value estimate. The act of directly comparing each sale to the subject is part of this overall analysis, but the crucial move right after data collection is to scrutinize the differences and how they impact value. Once you’ve understood these differences, you then correlate the data and derive a preliminary value estimate.