The Sales Comparison Approach to value is used extensively by fee appraisers. When you get your home financed the bank always requires an unbiased opinion of value so that they know they are not lending more money than the property is worth.
For houses especially, the Sales Comparison Approach is seen as the “go-to” approach to valuation by appraisers, lenders, Fannie Mae and Freddie Mac.
Market value can be defined as: The most probable price that a property would sell for on a specific date, in terms of cash, and provided that the property is exposed to the open market, and the buyer and seller are both acting in their own best interests and are not under any undue pressure.
Every state can have their own market value definition, but they all have all or most of the elements of the definition above.
The Income Approach uses capitalization to convert the anticipated benefits of the ownership of property into an estimate of present value.
The income approach is most commonly used in the valuation of commercial, income producing property. It can only be used on single family houses if there is a very active rental market in the neighborhood.
Ready to get under the Gold Dome? In this process you tell the tax assessor what you think your property is worth on the effective date of appraisal, which is January 1 of each year.
The property tax return form, PT-50R is shown on the following page. If you do not submit this form to the county where your property is located then you have, in effect, submitted the tax assessor’s prior year value as your estimate of value or “returned value.”