Appraiser Niles uses ________ to determine a range of values based on comparing a subject property to comparable sales. He makes sure to use some…

Bracketing is a fundamental technique within the sales comparison approach to appraisal. It involves the appraiser selecting a range of comparable properties, some of which are superior to the subject property and some of which are inferior in terms of their key characteristics (e.g., size, condition, features). The principle is that the value of the subject property should fall within the range established by these superior and inferior comparables after adjustments are made. This process helps to support the appraiser's final value conclusion and ensures a credible and defensible valuation.

B. Competition: This is an economic principle of value stating that market demand generates profits, which in turn attracts competition that can affect value, not a specific appraisal technique.

C. Correlation: This is the final step in the appraisal process, also known as reconciliation, where the appraiser weighs the different value indications to arrive at a single value estimate.

D. Substituting: This refers to the Principle of Substitution, the theoretical basis for the sales comparison approach, which states a buyer won't pay more for a property than for a comparable substitute.

1. The Appraisal Institute, The Appraisal of Real Estate, 14th Edition. Chicago: Appraisal Institute, 2013. In Chapter 18, "Sales Comparison Approach: Analysis and Application," the text explains that bracketing is a process of selecting comparables that are both superior and inferior to the subject property to establish a credible range of value and support adjustments.

2. Ling, David C., and Wayne R. Archer, Real Estate Principles: A Value Approach, 6th Edition. McGraw-Hill Education, 2020. Chapter 7, "Valuation Using the Sales Comparison and Cost Approaches," describes the selection of comparable sales, emphasizing the importance of bracketing the subject property's characteristics to produce a reliable value estimate (pp. 180-181).

3. University of North Texas, College of Business, REAL 3100: Principles of Real Estate Course Syllabus. The course curriculum covering the Sales Comparison Approach details the necessity of selecting comparables that "bracket" the subject property's physical and locational attributes to support the final opinion of value.