Principles of the Comparison Approach

In the case of appraisals for a residential apartment, the appraiser will usually prefer the comparison approach, and when it comes to residential apartments for income-generating investment purposes they will also add the income discounting approach method.

The comparison approach is the preferred method of appraisers to assess the monetary value of a residential apartment. Under this approach, the appraiser will include at least three valid comparison prices. For each component, the appraiser will give a coefficient value as a comparison to the apartment subject to the assessment.

As a rule, the appraiser will compare the apartment subject to the assessment with sales transactions made in other apartments in the area, as well as the prices of apartments that have not yet been sold in the area.
For all those apartments, the appraiser will give a negative or positive numerical value in percent compared to the apartment subject to the assessment.

Of course, the appraiser will strive to base the comparison on other apartments with as similar characteristics as possible to the apartment subject to the assessment, such as date, quality, size, finish, number of rooms, floor, proximity, and more.

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Apartments in Israel
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Average price for a 4 room apartment in Tel Aviv
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Rise in the price index of input in residential construction from the year 1956 to 2021
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