Which appraisal method is used for residential properties and vacant land?

Which appraisal method is used for residential properties and vacant land?

• A. Market Approach
• B. Cost Approach
• C. Sales Comparison Approach
• D. Income Approach

Answer: (C)

The Sales Comparison Approach is used for residential properties and vacant land. This method relies on recent sales of similar properties in the same area (comps) and adjusts those sale prices for differences in features, size, condition, and location. It works well here because home buyers and land buyers care most about what similar properties actually sold for in the current market, and there’s usually plenty of comparable data to guide the estimate. The other approaches serve different scenarios: the Cost Approach estimates value based on how much it would cost to replace the property, minus depreciation, which is more relevant for new construction or unique properties; the Income Approach values property based on the income it can generate, which is typical for rental or commercial properties.

The Sales Comparison Approach is used for residential properties and vacant land. This method relies on recent sales of similar properties in the same area (comps) and adjusts those sale prices for differences in features, size, condition, and location. It works well here because home buyers and land buyers care most about what similar properties actually sold for in the current market, and there’s usually plenty of comparable data to guide the estimate.

The other approaches serve different scenarios: the Cost Approach estimates value based on how much it would cost to replace the property, minus depreciation, which is more relevant for new construction or unique properties; the Income Approach values property based on the income it can generate, which is typical for rental or commercial properties.