Comparable Selection in the Sales Comparion Approach:
Analysis of the Previous Appraisal Cases of an Apartment Complex in Seoul

Hyeyeon Ho and Jun-Hyung Kim (2024. 12), "Comparable Selection in the Sales Comparison Approach: Analysis of the Previous Appraisal Cases of an Apartment Complex in Seoul," Journal of the Korea Real Estate Analysts Association, 30(4): 101-113.
호혜연·김준형 (2024. 12), “거래사례비교법의 비교사례 선정: 서울의 A공동주택 평가 사례 분석”, 「부동산학연구」, 30(4): 101-113.

Abstract

The sales comparison approach is the most common and widely used when there are a sufficient number of sales transactions. This approach estimates the value by comparing the sales prices of similar properties to the subject property. Therefore, the adequacy of the comparables determines the accuracy of the value of the subject property. This study quantitatively examines the comparable selection through the previous appraisal cases whether the appraisers objectively chose the most similar property to the subject property.

The results show that there is insufficient effort to find the most similar sales transactions when selecting comparables. It can be concluded that unlike the international standards, there is less specific standard for selecting the most similar cases from a number of sales transactions. Institutional and practical improvements are needed to ensure that comparables are strictly selected when using the sales comparison approach. Multiple comparables should be selected to control the subjectivity of the appraisers. Also, the criteria for determining similarity must be established for each type of property, and clear guidelines must be provided to enable similar transactions to be selected as comparables.

Keywords

Valuation, Sales Comparison Approach, Comparable, Sales Transactions, Similarity
감정평가, 거래사례비교법, 비교사례, 실거래가, 유사성