When valuing your home, the appraiser determines the age, quality, location, condition, style and size of your property. The appraiser then uses one or more of the following three methods to value real property:
- The Sales Comparison approach: sales of similar property are compared to each other. The appraiser then adjusts for differences (for example, one house may have more square footage than another). This method works well for valuing homes.
- The Cost approach: the cost to replace your property is adjusted for age and condition. This approach works well for new and unique properties.
- The Income approach: in general terms, income from rent is used to value property. This method works well for income producing properties (for example, apartment buildings and malls).