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A Note on the Optimal Selection and Weighting of Comparable Properties

Author: Donald R. Epley

Start Page: 175
End Page: 182
Volume: 14
Issue Number: 2
Year: 1997
Publication: Journal of Real Estate Research

Abstract: This paper reexamines the recommendation by Vandell (1991), Gau, Lai and Wang (1992, 1994) and Green (1994) for the use of the minimum variance and coefficient of variation criteria in the optimum selection of comparables. These authors under-emphasize the typical valuation scenario that involves extremely small samples. The analyst must rank the few available comparable properties and select the "best" to carry the most weight in the final estimate of value. Rank transformation regression is suggested as one approach that can be used to extract the buying trend. The commonly taught paired-sale analysis will remain as the industry tool until more accurate estimates of value are developed with small samples.

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