What methods are used for appraisals?
There are three methods used in appraising: The comparison method determines the value according to recent sales of comparable properties. Location, size and improvements are used among other criteria. The cost approach concerns improvements and the cost of replacing and/or reproducing them. Depreiciation and land values are also taken into account. The Capitalization approach is used mainly for income property. The appraiser will capitalize present and future income. Appraisals are made for the purposes of loans, insurance, taxation, sales, estate, etc.
