Which of the following is an advantage of the direct comparison approach?

• A. It reflects market behavior
• B. It requires least adjustment if sufficient data is available
• C. It is widely used
• D. It yields perfect results

Answer: (B)

The main idea here is that the direct comparison approach is strongest when you have a robust set of recent, similar sales to use as benchmarks. Because it relies on actual market transactions, you can anchor the value in prices that buyers and sellers actually agreed to.

When there are plenty of comparable sales, the differences between the subject property and each comparable can be minimized, so you apply only small adjustments for remaining differences. That means the resulting value is closely tied to observed market behavior, and the estimate tends to be more objective and credible. However, this advantage diminishes if there aren’t enough good comparables; then larger adjustments are needed or other valuation methods might be more reliable. It’s common and useful, but it does not guarantee perfect results.