Which appraisal approach is most commonly used for residential properties in a typical suburban neighbourhood with many comparable sales?
Correct Answer
D) Comparison approach
The comparison approach is most commonly used for residential properties because it relies on recent sales of similar properties in the same area, which provides the most reliable indication of market value for typical homes.
Why This Is the Correct Answer
The comparison approach is correct because it's the most reliable method for typical residential properties in active markets. It uses actual market data from recent sales of comparable properties, reflecting real buyer behavior and market conditions. This approach aligns with the principle of substitution and provides the most accurate indication of current market value when sufficient comparable sales data is available, which is typically the case in suburban neighborhoods.
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An appraiser must value a special-purpose building in British Columbia, such as a municipal fire hall, that has no comparable sales and produces no rental income. Which approach is usually most appropriate?
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