The abstraction extraction method is a technique used in real estate appraisal to estimate the value of a property’s land by analyzing the value of similar properties with structures or improvements. By comparing these properties, the appraiser calculates the value of the structures and deducts this amount from the total property value to isolate the land value. This method is particularly useful when determining the value of vacant land or properties with unique features.
Related terminology:
Appraisal
Comparative market analysis
Sales comparison approach
Cost approach
Income capitalization approach
Replacement cost
Reproduction cost
Residual land value
Highest and best use
Adjustment factors
References:
- Appraisal Institute: The Dictionary of Real Estate Appraisal
- Investopedia: Real Estate Appraisal – Definition and Explanation
- The Balance: Understanding Real Estate Appraisal Methods
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