American Society of Appraisers (ASA)
ASA, the American Society of Appraisers define the 3 USPAP approaches to value as follows:
- The Sales Comparison Approach to Value
The procedure to conclude an opinion of value for a property by comparing it with similar properties that have been sold or are for sale in the relevant marketplace by making adjustments to prices based on marketplace conditions and the properties´characteristics of value.
- The Cost Approach to Value
A procedure to estimate the current costs to reproduce or create a property with another of comparable use and marketability.
- The Income Approach to Value
A procedure to conclude an opinion of present value by calculating the anticipated monetary benefits (such as a stream of income) for an income-producing property.
USPAP requires appraisers to consider and use all approaches to value that are applicable in an appraisal assignment. The appraiser is required to include in their reports the reason for the exclusion of any approach to value and to describe the appraisal methods and techniques that supports the appraisers´ opinions and conclusions. The appraiser is required to provide reasons for why they did or did not use each approach for their analysis. Appraisers outside USA have the option to follow IVSC, International Valuation Standards Effective January 2020.
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