What adjustments are permissible with the Sales Comparison Approach?

The Sales Comparison Approach involves comparing a property to similar properties that have recently sold in the same area to estimate its value. In this approach, adjustments are made to account for differences between the comparables and the subject property.

Permissible adjustments are crucial since they ensure that the valuation reflects the actual market conditions and characteristics of the properties being compared. The accepted range for net adjustments in the Sales Comparison Approach is up to 15%, while gross adjustments can reach up to 25%. This means that when assessing comparables, the total adjustments for various factors (such as size, condition, and location) made to equalize differences are capped at these percentages.

Option C accurately reflects these industry standards. It allows assessors to make necessary adjustments while also maintaining a level of consistency and reliability in the appraisals. Thus, when applying this approach, the adjustments must not exceed these thresholds to ensure that the valuation remains credible and relevant in the market.