A market comparison analysis is an estimate of value obtained by comparing the subject property with recently sold comparable properties.

This approach is most often used by sales people when helping a seller set a list price for their property in an active market. Since no two parcels of Real estate are exactly alike, each comparable property must be compared to the subject property, and the sales prices must be adjusted for dissimilar features. The principle factors for which adjustments must be made fall into four basic categories.

1. Date of Sale: an adjustment must be made if economic changes occur between the date of sale of the comparable property and the date of the market evaluation.
2. Location: an adjustment may be necessary to compensate for location differences.
3. Physical Features: physical features that may cause adjustments include age of home, size of lot, landscaping, construction, number of rooms, square feet of living space, interior & exterior condition, presence or absence of a garage or air conditioning and so forth.
4. Terms and Conditions: this consideration becomes important if a sale is not financed by a standard Mortgage procedure.

The market comparison approach is essential in almost every market evaluation of real estate. It is reliable in evaluating residential property, where the amenities (intangible benefits) are so difficult to measure.