Which three approaches to value does a certified appraiser typically use?

A certified appraiser typically employs three primary approaches to value: the income approach, the cost-depreciation approach, and the comparable sales approach. Each of these methods serves a specific purpose and is applicable in different contexts to assess property value accurately.

The income approach is primarily used for income-generating properties, such as rental properties or commercial real estate. This method estimates value based on the potential income the property can produce, which is essential for investors and stakeholders in these sectors.

The cost-depreciation approach determines the value of a property by calculating the cost to replace it minus depreciation factors. This is particularly useful for new construction or unique properties where comparable sales may be hard to find, as it takes into account the current costs of materials and labor, along with any wear and tear the property may have experienced.

The comparable sales approach (often referred to simply as "comps") involves looking at the sale prices of similar properties in the same area. This method is particularly effective in residential real estate, as it provides a market-based perspective on value, relying on actual transactions to establish a fair market value.

By combining these three approaches, appraisers can arrive at a more balanced and accurate estimation of a property's value, taking into account different factors and perspectives