What is the main purpose of the Direct Comparison Approach in appraisal?

The main purpose of the Direct Comparison Approach in appraisal is to compare the property being appraised with similar properties that have recently been sold. This method relies on the premise that a property's value can be inferred by examining the sale prices of comparable properties, which are often referred to as "comps." By analyzing these comparable sales, appraisers can establish a fair market value for the property in question based on market behavior and trends.

The Direct Comparison Approach focuses on actual market transactions to provide a data-driven basis for valuation. It is particularly effective in markets where properties have common characteristics and are fairly interchangeable, allowing for more accurate assessments of value based on real-time sales information. This approach ensures that the appraisal reflects current market conditions and helps in determining a competitive price for buyers and sellers alike.