Real estate agents want to set correctlythe price of a house that’s about to go on the real estate
market. They must choose a price that strikes a balance
between one that is so high that the house takes too long
to sell and one that’s so low that not enough value will go
to the homeowner. One appraisal method is the “Comparative
Market Analysis” approach by which the market
value of a house is based on recent sales of similar homes
in the neighborhood. Because no two houses are exactly
the same, appraisers have to adjust comparable homes for
such features as extra square footage, bedrooms, fireplaces,
upgrading, parking facilities, swimming pool, lot size, location,
and so on. The appraised market values and the selling
prices of 45 homes from the same region are given.