Posted by JT-IN on September 09, 2002 at 22:20:46:
The methods are:
Replacement cost; what it woould cost to rebuild the structure new… This is the least used method, as what it costs to preplace something does not equal value.
Income Approach: This is generally used with income producing property, such as multi-family of 5 or more units. It could also be used in a vacation area, where a higher than normal income for a SFR coould be previlent.
Comparable sales; called comps… This is what has sold and closed in the immediate area. Generlly adjustments are made for size, condition, location, lot desirability, and on and on. Comps are what is used for SFR appraisal except in rare circumstances. Bottom line… what similar houses in the neighborhood have sold for.
Posted by Constance on September 09, 2002 at 20:27:04:
Hello. I am new to real estate investing. Please help.
Would you be able to explain in the simplest terms, or provide some techniques on how I would determine the value of a property (single family/two-family)without hiring the services of an appraiser?
Posted by Kent C on September 10, 2002 at 03:31:00:
I like the “comp” method for assessing value when I buy. This is what you can expect the market to pay you. You are seeing what equiv houses sell for in the area. You can expect a true appraisal price to probably be a tad higher than sales price. Appraisals are about 10% higher than sales price in my area. Midwestern prices in the $20k-$60k prices are starting to slide a bit. Our market is pulling back a little. New housing prices are still slowly rising though.