What is the difference between Sales Comparison Approach, Cost Approach, and Income Capitalization Approach?
Sales Comparison Approach takes into account the value of your property indicated by recent sales of comparable properties in your neighborhood. The Cost Approach looks at the current cost of replacing or rebuilding your home, less the estimated appreciation, plus the value of your land. With the Income Capitalization Approach, the income potential of your property is compared to expected returns on similar properties in the area. The Income Capitalization Approach is more often used where the property would be tenant occupied instead of single family owned. What is the difference between an Appraisal and an Inspection? An appraiser offers an unbiased estimate of market value based on observable conditions. Appraisers take into consideration what is “hot” in the current market and what typical buyers are willing to pay for a certain amenity or property location. A home inspector looks at the overall condition of the home and takes note of any repairs or replacements that are necessary.
