(951) 689-2511
(951) 689-2511

Funding the American Dream since 1989

Wednesday, September 20, 2017
| Login
  Search

California DRE License #01300753
NMLS License #304763

(951) 689-2511

California DRE License #01300753
NMLS License #304763

(951) 689-2511

Appraisal Methods

An appraisal is an opinion of value or the act or process of estimating value. This opinion or estimate is derived by using three common approaches, all derived from the market.

  1. The cost approach to determining value is to estimate what it would cost to replace or reproduce the improvements as of the date of the appraisal, less the physical deterioration, the functional obsolescence and the economic obsolescence. The remainder is added to the land value.
  2. The comparison approach to determining value makes use of other "benchmark" properties of similar size, quality and location that have been recently sold. A comparison is made to the subject property.
  3. The income approach to determining value is of primary importance in ascertaining the value of income producing properties and has little weight in residential properties. This approach provides an objective estimate of what a prudent investor would pay based upon the net income the property produces.

Then, after thorough analysis of all general and specific data gathered from the market, a final estimate or opinion of value is correlated.

powered by OpenClose Mortgage Software Copyright 2017 Campbell Financial Services Inc. Privacy Statement | Terms Of Use