For estimating the value of a parcel of vacant land, which approach would an appraiser most likely use?

When estimating the value of a parcel of vacant land, an appraiser would most likely utilize the market data approach, often referred to as the sales comparison approach, which involves comparing the subject property to similar properties that have recently sold within the same market area. This method is particularly effective for vacant land because it leverages actual market transactions to establish a realistic value based on what buyers are currently paying for similar properties.

The market data approach considers factors such as location, size, zoning, and physical characteristics of the land. By analyzing sales data from comparable properties, the appraiser can accurately gauge the market trends and establish a value that reflects current demand and market conditions.

While the cost and income approaches may be useful in certain contexts, they are generally more applicable to improved properties with structures already in place. The cost approach estimates value based on the cost of replacing or reproducing improvements, while the income approach relies on the income-generating potential of the property, which is not applicable to vacant land that currently does not produce income. Therefore, the market data approach stands out as the most suitable method for valuing vacant land.