What approach uses sales of comparable parcels to determine the value of a subject land parcel?

The correct answer is the Sales Comparison Approach. This method is grounded in the principle of substitution, which states that a buyer would not pay more for a property than the cost of acquiring a comparable property. In this approach, assessors analyze the sale prices of similar properties that have recently sold in the same market area. By examining these comparable sales, assessors can establish a fair market value for the subject land parcel.

This approach is particularly effective in active real estate markets with sufficient sales data, as it reflects current market conditions and buyer preferences. It allows the assessor to make informed adjustments based on differences in features, location, and sale circumstances between the comparable properties and the subject parcel.

The other approaches serve different purposes in valuation. The Income Approach, for example, is typically used for income-generating properties and is based on the income the property can produce. The Cost Approach focuses on the cost to replace or reproduce the property minus any physical depreciation. The Market Data Approach is a broader term that can sometimes overlap with the Sales Comparison Approach but is less commonly used as a definitive term in property valuation contexts.