Certified Apartment Portfolio Supervisor (CAPS) Practice Exam 2025 - Free Module 2 Practice Questions and Study Guide

The sales comparison approach to determining a property's market value is fundamentally based on the principle of comparing similar properties that have recently sold in the same market. This method involves looking at the sale prices of comparable properties, also known as "comps," which are similar in location, size, and features to the subject property. By analyzing these sale prices, appraisers can estimate the market value of the property in question.

This principle is grounded in the idea that a property's value is directly influenced by the prices of similar properties in the area, reflecting the current market demand and conditions. The use of comparable sales ensures that the assessment is relevant and aligned with what buyers are presently willing to pay for similar homes in that specific market, making it a widely accepted method in real estate appraisal. By focusing on actual sale transactions, this approach provides a reliable and objective means of assessing market value, which is critical for buyers, sellers, and investors alike.