Which appraisal approach would be best used when there is significant market data available for comparable properties?

The sales comparison approach is the most suitable method when there is significant market data available for comparable properties. This approach relies heavily on analyzing recent sales of similar properties to estimate the value of the property being assessed. By comparing the characteristics and sale prices of those comparable properties, appraisers can derive a more accurate value for the subject property based on the principle of substitution, where a knowledgeable buyer would not pay more for a property than what they would pay for a comparable one.

The effectiveness of this approach is enhanced when there is an abundance of relevant data, such as recent sales transactions and details about properties that are similar in size, location, and features. This abundance of real-world data allows for a more precise and supported valuation. In markets where such data is readily available, the sales comparison approach can reflect current market conditions and buyer preferences more effectively than other methods.

In contrast, other approaches may not leverage market data as effectively. The cost approach is more focused on estimating the cost to replace or reproduce the asset, rather than analyzing market transactions. The income approach is typically used for properties that generate income, like commercial real estate, and relies on rental income data and capitalization rates rather than direct market comparisons. The reconciliation approach is not a standalone appraisal method but rather