Comparables Method

The comparables method examines similar properties that sold recently to derive a value for property.

There are problems with this method:

• The accuracy of the appraisal is dependent upon which comparable properties are selected.

• When structural changes affecting of Bundle of Rights called Real Estate, occur, the market reacts slowly and comparables become hard to find.

• Often the same property may have different values depending on the intentions of the prospective purchasers.

Though this method is considered the most reliable, the fundamental assumption is based on Carl Jungs principle of Consensual Validation commonly called the Greater Fool Theory i.e. "if they paid that much, this one must be worth more!"