Comparable sales are routinely utilized to develop an opinion of value using the sales comparison approach, one of the three primary approaches to valuing real estate.
The cost approach was historically prepared as a part of most commercial real estate appraisals. However, the compunction to include the cost approach (when it was not relevant) has dissipated over the last 20 years.
Mistakes only make you tougher and wiser. However, there are certain mistakes that you cannot afford, especially when it concerns business in the real estate. There is no point in committing mistakes especially if you have a lot of resources to use. In real estate, mistakes are common. And although the person involved learns from it, it will take time before he can fully recover from it. Among those who often commits mistakes are the sellers.
Commercial comparable sales can be used to perform analysis regarding a variety of factors and issues impacting the value of real estate. The basic technique is to identify two sales that are identical except for the issue being evaluated.
Comparable sales are the key ingredients in performing the sales comparison analysis. The sales comparison analysis is one of three primary approaches to valuing real estate.
Commercial comparable sales are the building block of the sales comparison approach. The quality and quantity of comparable sales data impacts the reliability of the sales comparison approach. Selecting comparable sales that are most similar to the subject property requires analysis and judgment.
Lease abstraction is an essential component of due diligence for a multi-tenant commercial property. Lease terms often vary from tenant to tenant. Lease terms and options impact both the quantity and quality of rental income.
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