| Sales Comparison Approach | Value is obtained by comparing the property being appraised with recently sold comparable properties. Is considered the most reliable of the three for single family homes. |
| Income approach | Assumes that the income generated by a property will determine the properties value. Most commonly used for multi families and apartment buildings |
| Cost Approach | Based on the principle of substitution but deducts depreciation. It takes into consideration what needs to be fixed. |
| The principal of regression | When a properties value is lower because of less valuable properties in its vicinity. |
| Value is created by | Dust - demand, utility, scarcity, and transferability |
| Appraisal | Provides the appraisers opinion of value. Based on supportable evidence and methods. |
| Principle of Substitution | The maximum value of a property tends to be set by how much it would cost to purchase an equally desirable substitute property |
| Depreciation | Is the result of a negative condition that effects real property it is a loss in value. ex. porch needs to be re done. Land does not depreciate it retains its value. |
