The Comparable Sales Approach is used for what purpose in real estate?

The Comparable Sales Approach is used primarily to estimate value based on recent sales of similar properties in the area. This method relies on the premise that the value of a property can be determined by looking at the sale prices of comparable properties that have recently sold. By analyzing these sales, real estate professionals can make an informed judgment about the market value of a property in question. This approach is particularly useful in residential real estate, where properties are often similar in design and location, allowing for a more accurate comparison.

The other options have their distinct purposes but do not align with the primary function of the Comparable Sales Approach. For instance, calculating rental income potential typically involves different methodologies focusing on income analysis rather than sales comparisons. Determining building costs would involve estimating expenses related to construction rather than comparing past sales. Lastly, assessing market trends over time usually requires broader data analysis over longer periods rather than focusing on recent sales to derive value at a specific point in time.