Whats the difference between “cost approach” and “income approach” when figuring the value of real estate?
The cost approach says that no rational person will pay more for the property based upon it’s land value, construction costs, depreciation, and it’s desirability.The income approach is based upon the estimated net income from rent or the operation of a business based upon other properties like it.If you are buying the property for your own personal residence, the appraiser will determine it’s value based upon the “cost approach” only.Did you know that you have a right to get a copy of your appraisal?Under the law, your lender must provide you with a copy of the appraisal report if you send them a written request and you have paid for it (either at the time the appraisal was done or by closing on your mortgage). If you are dissatisfied with the information, you should contact the lender immediately.
