How does the assessor estimate market value?
Appraisers use three approaches to determine the market value of your property: market approach, cost approach and income approach. Market Approach The market approach uses sales of similar property as evidence of market value. Because no two properties are exactly alike the comparable properties’ sales are adjusted by adding or subtracting for features that are different than the subject property. Adjustments may also be made for time and terms of the sale. The market approach is most suitable for the appraisal of single-family dwellings and vacant land when there are frequent sales. This approach is sometimes used for multi-unit dwellings and commercial property. Cost Approach The cost approach is based on the idea that the value of an existing property is the value of the land plus the replacement cost of the improvements minus depreciation. Depreciation is not the number of years the improvements have been used; it is the loss in value due to physical deterioration, functional and/
