The sales comparison approach values real estate based on recent sales of comparable properties with adjustments for differences. Core sanity check for LA multifamily pricing alongside income approach.
Select 3-6 comparable closed sales in the same submarket, adjust for differences (unit count, age, condition, rent roll), arrive at an indicated price. Comparables should be recent (ideally within 90 days), similar in profile, and verifiable.
LA multifamily sales comparison is central to broker valuations and buyer underwriting. The "comparable closed sales" you should require from any broker BOV come from this approach. Without specific comparable closings, valuations are ungrounded.
From the Sterman LA Multifamily Glossary — defined the way a broker with $1.41 billion across 254 closed transactions actually uses these terms.
Michael Sterman, Senior Managing Director Investments, Marcus & Millichap.
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