What method does a loan originator use to estimate the value of property based on sales of similar properties?

The method used by a loan originator to estimate the value of property based on sales of similar properties is known as an appraisal. An appraisal is a professional assessment conducted by a licensed appraiser, who evaluates the property in question by comparing it to recently sold properties in the area that are similar in terms of size, condition, and features. This process is crucial in determining the fair market value of the property, which impacts how much lenders are willing to finance.

In contrast, a market survey generally refers to a broader investigation into real estate trends and conditions in a specific area rather than evaluating the value of an individual property. An area survey is similarly focused on the geographical characteristics and demographics of a region, without providing a specific property valuation. A cost-benefit analysis, while useful in many financial contexts, assesses the financial viability of a project rather than determining property value based on comparable sales. Thus, the appraisal is the correct method for estimating property value in real estate transactions.