How to select and adjust comparable evidence for valuations

Valuations depend on comparable evidence. The quality of a valuation is largely determined by how well the comparable selection and adjustment process is executed.

This is the methodology at the heart of the sales comparison approach — and it is the most common method used in residential and mixed-use valuation.

Selecting comparables

Comparables should be as similar as possible to the subject property in terms of location, size, specification, and date of transaction. The closer the comparable, the fewer adjustments are required — and the more defensible the output.

In practice, you will rarely find perfect comparables. The question is how far you can stretch the comp set while maintaining credibility. As a rule, adjustments beyond 15–20% of the comparable price start to undermine the analysis.

Making adjustments

Each difference between the comparable and the subject requires an adjustment. Common adjustment factors include:

Floor level — higher floors typically command a premium in high-rise residential. The premium varies by building and submarket.

Size — larger units trade at a discount on a per-sqft basis. This is the size-price curve, and it varies by unit type.

Specification — refurbished or upgraded units trade above base spec. The premium depends on the nature and extent of works.

Date — older transactions need to be time-adjusted to reflect market movements since the transaction date.

Building the valuation range

Once adjustments are made, you have an adjusted price per sqft for each comparable. A defensible valuation range sits within the distribution of these adjusted values — typically anchored to the median, with a range reflecting the spread and quality of evidence.

The output is not a single number. It is a range, with a point estimate, and an explicit statement of the evidence and methodology behind it. That is what makes it defensible at sign-off.