When preparing an estimate of value for a 30-year-old house, which approach to value is most likely to be used by an appraiser?

When estimating the value of a 30-year-old house, the market data approach is most suitable as it focuses on comparable sales in the area. This method involves analyzing recent sales of similar properties to determine a reasonable estimate of value based on what buyers are willing to pay in the current market.

The market data approach is particularly effective for residential properties, like a 30-year-old house, because it reflects real-world transactions and local market conditions. By comparing the subject property to those that have recently sold, the appraiser can account for the nuances of the local real estate market, such as neighborhood trends, property condition, and specific features that might influence value.

In contrast, the cost approach is more applicable when dealing with new constructions or unique properties where recent sales data may not be readily available. The income approach is typically used for investment properties, where the value is derived from the income generated from the property rather than direct sales comparisons. A comparative market analysis, while similar to the market data approach, is often performed by real estate agents for pricing recommendations rather than the formal appraisal process.

Overall, the market data approach aligns most closely with the needs of valuing a 30-year-old residential property, making it the most appropriate choice in this scenario.