[Svg-icons-commit] NUMBER ONE Success System

[Tommy Lee]

http://www.noss123.com/

Three approaches to value
There are three general groups of methodologies for determining value. These
are usually referred to as the "three approaches to value":

   - The Cost Approach
   - The Sales Comparison Approach and
   - The Income Approach

The appraiser will determine which one or more of these approaches may be
applicable, based on the scope of work determination, and from that develop
an appraisal analysis. Costs, income, and sales vary widely from one
situation to the next, and particular importance is given to the specific
characteristics of the subject.

Consideration is also given to the market for the property appraised.
Appraisals of properties that are typically purchased by investors (e.g. -
skyscrapers) may give greater weight to the income approach, while small
retail or office properties, often purchased by owner-users, may give
greater weighting to the sales comparison approach. While this may seem
simple, it is not always obvious. For example, apartment complexes of a
given quality tend to sell at a price per apartment, and as such the sales
comparison approach may be more applicable. Single family residences are
most commonly valued with greatest weighting to the sales comparison
approach, but if a single family dwelling is in a neighborhood where all or
most of the dwellings are rental units, then some variant of the income
approach may be more useful.
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