What is the term for methods used to estimate the value of real property?

The term "Approaches to value" is used in real estate appraisal to describe the various methods employed to estimate the value of real property. This encompasses a range of techniques that appraisers utilize to derive a property’s value based on different factors and perspectives.

The three main approaches to value include the Cost Approach, the Sales Comparison Approach, and the Income Approach. Each approach serves a distinct purpose and is suitable for different types of properties or market conditions. For example, the Sales Comparison Approach is often used for residential properties where recent sales data is readily available, while the Income Approach is more applicable for investment properties generating rental income.

Understanding the different approaches to value is crucial for an appraiser to accurately determine property value in accordance with market data and property characteristics. This term captures the comprehensive nature of the methods involved in the valuation process, distinguishing them from methodologies specific to analyzing market trends, comparative transactions, or simply categorizing broader valuation concepts.