Fair Market Value is the amount an informed buyer is willing to pay and an informed seller is willing to accept for property on an open market without undue influences. The County Appraiser considers three different approaches to achieve Fair Market Value...
Sales Approach: The Appraiser reviews similar properties that have sold, compares them to your property and may make adjustments for differing characteristics. This type is typically applied to residential property in areas with a substantial number of sales but some counties may also apply it to commercial properties.
Cost Approach: The appraiser determines replacement cost new of the property less depreciation. This approach is particularly helpful when property is new or unique or if there are few sales in the area.
Income Approach: The value of the property is estimated using the income the property is expected to produce in the future. It is used to value commercial property and apartments when sufficient market rent information is available but some appraisers may also develop a type of income approach for houses in areas with a substantial number of rental properties.