In real estate appraisal, the market data approach is a method of estimating the value of a property by comparing it to similar properties that have recently sold. The appraiser analyzes these comparable sales to identify patterns in pricing and market behavior, adjusting for differences such as location, size, condition, and features.
This approach is the most widely used of the three primary appraisal methods for residential property because it reflects the actions of buyers and sellers in the open market. By relying on actual sales data, the market data approach provides an indication of value based on what purchasers are currently willing to pay for similar properties under comparable conditions.
