Valuation, Pricing, and Comparative Market Analysis
Value and approaches
Market value assumes a willing buyer and seller, both informed, no undue pressure, and a reasonable marketing period. The sales comparison approach dominates residential work; cost and income approaches (capitalization rate) support unique or investment property. A CMA is a brokerage opinion of price; an appraisal is a licensed valuation used by lenders.
Adjusting comparables
Adjustments are made to the comparable, bringing it toward the subject. If the comparable is superior, subtract; if inferior, add. Adjust for square footage, garage, lot, condition, waterfront, view, and date of sale. Keep adjustments modest and market-supported.
Worked example: Subject is 1,800 sq ft; comparable sold for $310,000 at 2,000 sq ft. At $50/sq ft, subtract $10,000 for the extra 200 sq ft, then add $15,000 because the comparable lacks the subject's garage: 310,000 − 10,000 + 15,000 = $315,000 adjusted value.
Pricing and market analysis
Review list-to-sale ratios, days on market, absorption rate, and competing inventory. Maine premiums attach to waterfront, year-round access, and views; discounts attach to shoreland constraints, seasonal access, and deferred maintenance.
Traps: adding when the comparable is superior; adjusting the subject instead of the comparable; using a distressed sale or a non-arm's-length transfer as a comp.