An appraiser performs an evaluation that produces an opinion of value.

There are three “common approaches to value” which helps the appraiser arrive at this opinion or valuation.

The Cost Approach is one of the methods that real estate appraisers use to find the value of a home; it involves finding what the improvements would cost minus physical deterioration, adding the land value.

Easily the most common approach in finding the value of a home is the Sales Comparison Approach which concerns concluding a comparison to comparable homes nearby.

Being the most popular approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a home.

The Income Approach is primarily used for determining the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.