Which appraisal approach is most commonly used for residential properties in Canada?
Correct Answer
A) Comparison approach
The comparison approach (also called market approach) is most commonly used for residential properties because there are typically sufficient comparable sales of similar homes in the market. This approach relies on recent sales of similar properties to determine fair market value.
Why This Is the Correct Answer
The comparison approach (market approach) is the most commonly used method for residential property valuation in Canada because residential markets typically have abundant comparable sales data. This approach analyzes recent sales of similar properties in the same area, adjusting for differences in size, condition, location, and features. The availability of multiple comparable transactions makes this method reliable and widely accepted by lenders, appraisers, and real estate professionals for determining fair market value of homes.
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