Question

The three main methods of appraising real estate are

Select one:

a. the capitalization approach, the tax assessment approach, and the sales comparison approach

b. the cost approach, the income approach, and the sales comparison approach

c. the insured value approach, the cost approach, and the land residual approach

d. any of the methods listed above may be used by an appraiser to value real estate

Answer 1

The three main methods of appraising real estate are:

1.Cost approach: it is based on the premise that a buyer would pay no more for a real estate property than the cost to construct a comparable property.

2.Income approach: The price of a property is estimated based on the property's income generating caapcity in the future and its operating expenses and vacancy rates.

3.Sales comparison approach: The value of real estate is determined by comparing similar recently sold real estate property close to the valuation date.

Hence, the answer is option b.