How Residential Properties are Valued: A Comprehensive Guide
Hey there, Montgomery County homeowners! Today, we're diving into the fascinating world of property valuation. Whether you're buying, selling, or just curious, understanding how your home’s value is determined can be incredibly helpful. We’ll cover the three main methods of residential property valuation, give examples, and explain when each method is most appropriate. Let’s get into it! The Three Methods of Property Valuation 1. The Sales Comparison Approach (SCA) What It Is: The Sales Comparison Approach (SCA) is the most commonly used method for valuing residential properties. It involves comparing the subject property to similar properties (comps) that have recently sold in the same area. Example: Imagine you own a three-bedroom home in The Woodlands. To determine its value, an appraiser will look at similar homes in The Woodlands that have sold within the last six months. If a similar home sold for $350,000, and another for $355,000, these figures will help set a baselin