Select comparable properties in same area that sold recently:
Of course, we want to select comparable properties based on features and we need properties that are in the same area or as close as possible. Also, the sold properties selected need to have been sold as recently as possible. If only older sales are available, adjustments may need to be made for market valuation changes.
Some features that need to be compared and adusted for:
Take each comparable sold property and add or subtract the value of features in comparison to the subject property. The appraiser and the real estate agent approach this comparison in similar manners, though the appraiser usually goes into it more in-depth.
Be sure to adjust for unusual or unrealistic prices:
There are many factors that can cause a property to sell for higher or lower pricing than justified by the property characteristics or the comparable properties close-by.
Be sure to either not use a comparable or make adjustments for sold prices that could have been influenced by divorce, death, unusually favorable financing terms, or other unusual situations.
