Posted by JT-IN on September 09, 2002 at 22:20:46:
The methods are:
Replacement cost; what it woould cost to rebuild the structure new… This is the least used method, as what it costs to preplace something does not equal value.
Income Approach: This is generally used with income producing property, such as multi-family of 5 or more units. It could also be used in a vacation area, where a higher than normal income for a SFR coould be previlent.
Comparable sales; called comps… This is what has sold and closed in the immediate area. Generlly adjustments are made for size, condition, location, lot desirability, and on and on. Comps are what is used for SFR appraisal except in rare circumstances. Bottom line… what similar houses in the neighborhood have sold for.