Comparative Market Analysis (CMA)
Comparative Market Analysis (CMA) is a commonly used method for house valuation. It involves comparing the property being valued to similar properties that have recently sold in the same area. The CMA takes into account factors such as size, location, condition, and amenities. By analyzing recent sales data, an appraiser or real estate agent can estimate the value of the property.
Income Approach
The income approach is a valuation method primarily used for rental properties or properties that generate income. This method calculates the value of the property based on its income potential. It takes into account factors such as rental income, expenses, and market rental rates. The income approach is commonly used by investors and appraisers to determine the value of income-generating properties.
Cost Approach
The cost approach is a method used to estimate the value of a property based on the cost to replace or reproduce it. It takes into account the land value, construction costs, and depreciation. This method is often used for unique properties or properties that do not have recent sales data. Appraisers consider factors such as the age of the property, condition, and current construction costs.
Automated Valuation Models (AVMs)
Automated Valuation Models (AVMs) are computer algorithms that estimate the value of a property based on various data sources. These models use statistical analysis and market trends to calculate the value of a house. AVMs consider factors such as sales data, property characteristics, and market conditions. While AVMs can provide a quick estimate, they may not be as accurate as other methods due to their reliance on data.