2.3.3.4. Sales Comparison Approach.Each appraisal report must contain a sufficient description of the comparable sales131 used so that it is possible for the reader to understand the conclusions drawn by the appraiser from the comparable sales data. Photographs of the comparable sales are valuable visual aids that indicate the comparability of the property recently sold with the subject property. Such photographs must accompany each appraisal report not only to aid the review appraiser but also for the agency’s records and for later use in possible condemnation litigation. In addition to the identification of the property, every photograph should show the date taken and the name of the person taking the photograph. 

Documentation of each comparable sale shall include the name of the buyer and seller, date of sale, legal description,132 type of sale instrument, document recording information, price, terms of sale, location, zoning, present use, highest and best use, and a brief physical description of the property. A plot plan or sketch of each comparable property should be included, not only to facilitate the reader’s understanding of the relationship between the sale property and the subject property, but also to locate the sale property in the field. This information may be summarized for each sale on a comparable sales form and included in this section or in the addenda of the report. As noted, a photograph of each comparable sale shall also be included. A comparable sales map showing the relative location of the comparable sales to the subject property133 shall be included, either in this section or in the addenda of the report. Inclusion of a copy of the transfer document (e.g., deed, contract) in the report is neither required nor desirable, unless there is something in the document that is unusual or particularly revealing. 

As discussed in Section 1.5.2.3, the preferred method of adjusting comparable sales is through the use of quantitative adjustments (whenever adequate market data exists to support them). Only when adequate market data does not exist to support quantitative adjustments should the appraiser resort to qualitative adjustments (i.e., inferior, superior). Appraisers must bear in mind that quantitative and qualitative adjustments are not mutually exclusive methodologies. Because one factor of adjustment cannot be quantified by market data does not mean that all adjustments to a sale property must be qualitative. All factors that can be quantified should be adjusted accordingly. When quantitative and qualitative adjustments are both used in the adjustment process, all quantitative adjustments should be made first. When using quantitative adjustments, appraisers must recognize that not all factors are suitable for percentage adjustments. Percentage and dollar adjustments may and often should be combined.134 Each item of adjustment must be carefully analyzed to determine whether a percentage or dollar adjustment is appropriate. 

When appraisers must resort to qualitative adjustments, they must recognize that this form of comparative analysis will often require more extensive discussion of the appraiser’s reasoning. This methodology may also require the presentation of a greater number of comparable sales. It is essential, of course, that the appraiser specifically state whether each comparable sale is generally either overall superior or inferior to the property under appraisal. To develop a valid indication of value of the property under appraisal by the use of qualitative analysis, it is essential that the comparable sales utilized include both sales that are overall superior and overall inferior to the subject property. If this is not done, the appraiser will have merely demonstrated that the property is worth more than a certain amount (if all of the sales are inferior to the subject property) or less than a certain amount (if all of the sales are superior to the subject property). 

In developing a final opinion of value by the sales comparison approach, the appraiser shall explain the comparative weight given to each comparable sale, no matter whether quantitative or qualitative adjustments or a combination thereof are used. A comparative adjustment chart or graph is required and may assist appraisers in explaining their analysis in this regard.