How is Appraised Value developed?

The development of appraised value primarily relies on using sales prices of comparable properties and cost data. This approach is fundamental to the appraisal process because it ensures that the value assigned to a property reflects current market conditions and the value of similar properties that have recently sold. By comparing the subject property to others that have recently sold in the same area, appraisers can evaluate the market trends and determine an objective value based on actual transactions.

Additionally, cost data is used to assess the value from a different perspective, such as the cost to replace or reproduce the property. This combination of data analytics ensures a comprehensive understanding of market dynamics and proper valuation of the property in question.

Other methods, while informative, do not offer the same level of accuracy and relevance in deriving appraised value as the comparative market analysis and cost approach do. The focus on market transactions directly correlates to how much buyers are willing to pay, making it a reliable basis for appraised value.