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"Appraisal Methodology" refers to the different approaches or techniques used by appraisers to estimate the value of a property.
There are three primary methods used in real estate appraisals: the Sales Comparison Approach, the Cost Approach, and the Income Capitalization Approach. Each method considers different factors and is more suitable for certain types of properties.
"A Deep Dive for Real Estate Appraisers"
Sales Comparison Approach: This method compares the property being appraised to similar properties that have recently sold in the same area. Adjustments are made for differences in features, size, and other factors to estimate the property's value.
Cost Approach: This method estimates the value of a property by calculating the cost of building a similar property from scratch, considering land value and depreciation. It's often used for new or unique properties that don't have many comparable sales.
Income Capitalization Approach: This method is mainly used for income-producing properties, like apartments or office buildings. It estimates the property's value based on the income it generates and the expected rate of return on investment.
"Wit & Whimsy with the Dumb Ox: Unlocking Knowledge with Rhyme:"
In the world of appraisals, a term you'll want to know,
Appraisal Methodology, determines value's show.
Three methods used by appraisers, to find a property's worth,
Sales Comparison, Cost Approach, and Income, they unearth.
Sales Comparison checks nearby sales, adjusting as they go,
Cost Approach looks at building costs, and land's value they'll bestow.
Income Capitalization checks the rent, and investment's rate,
To find the value of a property, these methods all create.
So when you study real estate, and terms you'll need to learn,
Remember Appraisal Methodology, for value's twists and turns!