What additional factor is considered when selecting comparable properties in the sales comparison approach?

In the sales comparison approach, selecting comparable properties relies heavily on the specifics of market conditions and financing terms surrounding each property transaction. Financing terms are particularly important because they can significantly impact the sale price of comparable properties. For example, favorable financing options may make a property more attractive to buyers, possibly leading to a higher sale price than similar properties with less appealing financing conditions.

When appraisers assess comparable properties, they carefully evaluate how the financing arrangements, such as interest rates, loan types, or seller concessions, may have influenced the sale prices of those properties. This additional layer of scrutiny helps ensure a more accurate assessment of value, as it places the properties being compared in a similar financial context.

Market conditions are also fundamental but are broader and often implicitly considered when evaluating comparable property prices, whereas financing terms offer a more direct influence on individual transactions. Property tax rates may influence buyer perceptions and operating costs but do not generally affect the comparative analysis in the same immediate way as financing terms do. The appraisal method is related to the overall approach but does not serve as a factor in the selection of comparables.