FINE 445 Chapter 7: Chap007
Document Summary
Typically, the income approach is difficult to use because the sale of single family, rental properties are rare in the area. When using the market approach, the appraiser estimates the value of a property by comparing the selling prices of properties similar to, and near, the property being appraised. Because no two properties are exactly alike, the values of similar properties are adjusted by the appraiser for dissimilarities. When using the cost approach, the appraiser establishes a value for the site on which the improvement is located, then determines the cost of reproducing the improvements and adds the two. After the costs of the improvement and land value are added, the appraiser deducts an amount for any depreciation that improvements have suffered since they were constructed. List four important drivers of housing demand and price appreciation. Population growth, income, households, price of rental housing. Public goods include education, police, fire, health and other services provided by the local public sector.
