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<br />DAHLEN & DWYER, INC. <br /> <br />DIRECT SALES COMPARISON APPROACH <br /> <br />This portion of the appraisal process involves the direct comparison of the <br />property being appraised to similar properties that have sold in the same or similar <br />markets in the recent past, in order to arrive at an indication of value for the subject <br />property. This approach is also called the Market Data Approach. <br /> <br />Among the basic real estate principles reflected in this approach is the principle <br />of substitution, which states, in part, that the value of the property replaceable in the <br />market tends to be set by the cost of acquiring an equally desirable substitute <br />property, assuming that no costly delay is encountered in making the substitution. <br /> <br />The application of this approach involves market research to obtain recent sales <br />of properties as similar as possible to the subject. The sale prices of those properties <br />deemed most comparable tend to set the range in which the value of the subject <br />property will fall. Differences between the subject and the comparables are analyzed <br />based upon market reaction to a figure representing the value of the subject property <br />which is the probable price that a willing seller could obtain as of the date of the <br />appraisal. The following analysis is a presentation of the comparable sales which your <br />appraiser believes possess the highest degree of similarity to the subject property and <br />therefore provide an adequate reflection of the market value estimate for the subject. <br /> <br />22 <br />