Cost approach
Valuing a property by estimating land value plus what it would cost to rebuild the structure, minus wear and age. It is most useful for new or unusual buildings.
Also called: replacement cost approach
Related terms
The main way homes are appraised: comparing the property to recent similar sales and adjusting for differences.
Valuing a property based on the income it produces, often by dividing net operating income by a cap rate. It is used mainly for rentals and commercial property.
A home that is newly built or still being built, usually sold by the builder. Builder contracts differ from resale contracts, and the sales rep works for the builder.
A licensed appraiser's professional opinion of what a home is worth. Lenders require one to make sure the home supports the loan amount.