An appraisal of Arizona real estate is the valuation of the
rights of ownership. The appraiser must define the rights to be
appraised. The appraiser does not create value, the appraiser
interprets the market to arrive at a value estimate. As the
appraiser compiles data pertinent to a report, consideration must
be given to the site and amenities as well as the physical
condition of the property. Considerable research and collection of
data must be completed prior to the appraiser arriving at a final
opinion of value.
Using three common approaches, which are all derived from the market, derives the opinion, or estimate of value. The first approach to value is the COST APPROACH. This method derives what it would cost to replace the existing improvements as of the date of the appraisal, less any physical deterioration, functional obsolescence, and economic obsolescence. The second method is the COMPARISON APPROACH, which uses other "bench mark" properties (comps) of similar size, quality and location that have recently sold to determine value. The INCOME APPROACH is used in the appraisal of rental properties and has little use in the valuation of single family dwellings. This approach provides an objective estimate of what a prudent investor would pay based on the net income the property produces.