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How do appraisers calculate home’s market value?

Three basic methods involved

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Although appraisers use three basic "approaches" to arrive at their professional appraisal of a property's market value, not all methods are appropriate for each property. But in some situations, all three approaches are used. Here is a look at the most common methodology used by appraisers: 1. REPLACEMENT-COST APPROACH. This appraisal method usually involves multiplying the square footage of the structure by the current construction cost for comparable quality to arrive at the estimated replacement cost of a building. When using this method, the key to success is starting with an accurate source of current local construction costs, such as home builders Marshall & Swift, and the Bluebook. Purchase Bob Bruss reports online. The next step, probably the most difficult for an appraiser, is to estimate applicable depreciation for an older structure to arrive at a reasonable replacement cost-estimate. The land value, based on cost per square foot, is then added to arrive at the property...