Comparative Method

Question 1

What is the comparative method used for?

Answer 1

• It is used when valuing properties where frequent market transactions provide reliable comparable evidence.

Question 2

What are the six steps of the comparative method?

Answer 2

• Search and select comparables.
• Verify and analyse headline rents.
• Assemble comparable schedule.
• Adjust comparables using hierarchy of evidence.
• Form opinion of value.
• Report value and record justification.

Question 3

Why are adjustments needed in the comparative method?

Answer 3

• To account for differences in size, condition, lease terms, incentives or location.

Question 4

What is zoning in retail valuation?

Answer 4

• A technique dividing retail depth into zones (A, B, C), halving rental value each zone back.
• Creates a standard unit of comparison.

Question 5

What is the halving‑back principle?

Answer 5

• Zone A is full rate; Zone B is half; Zone C is half again.
• Reflects decreasing rental value with distance from frontage.

Question 6

What are quantum allowances?

Answer 6

• Adjustments applied for unusually large or small units.
• Recognise diminishing marginal value of excessive floor area.