David Saks: April 2013

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

Real Estate Practice : Lesson 2152


An appraiser was contacted and asked to appraise a home.

There have been quite a few sales in the area due to the recent economic climate and the lowering of prices.

The best type of appraisal for the appraiser to use in this situation is an income capitalization approach to the appraisal.

Is this true or false ?

Please take your time. The solution is posted below the wildlife photo.


A. False

The type of appraisal method best served in this example is the 'sales comparison approach' which is also a market data approach or a comparable sales approach which will estimate the market value of a home by comparing the home to recent sales of homes which are comparable to our subject home in size, amenity, and equality to other recently sold properties within the same area.

An income capitalization approach, or the income approach, is for the purpose of appraising real estate which produces income.

Essentially two methods are used in the income approach, and they are the 'gross income multiplier' and the 'income capitalization method', which we'll look at later.

David Saks

Time&Temp Memphis

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Comment balloon 0 commentsDavid Saks • April 29 2013 03:53AM
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