What is typically regarded as the most common method of valuation in appraisal practice?

The sales comparison method is typically regarded as the most common method of valuation in appraisal practice, particularly for residential properties. This approach involves comparing the property being appraised to similar properties that have recently sold in the same area. By evaluating the sale prices of these comparables, appraisers can estimate a fair market value for the subject property. This method is widely favored because it reflects current market conditions and buyer behavior, making it particularly relevant for properties in active markets.

The cost method is more often used for unique properties or new constructions, where it is easier to calculate building costs than to find suitable comparables. The income approach is primarily applied to income-generating properties, such as investment real estate, where future income potential is critical. Although the capitalization comparison method is relevant, it is generally less common than the sales comparison method due to its specific focus on properties generating income.

Understanding the nuances of these different valuation methods is crucial for real estate appraisers, as selecting the appropriate method based on the property type and market conditions directly impacts accuracy in valuation.