There are three commonly methods used to assessed properties which are as follows:

• Market Approach/Sales Comparison Approach: This approach adopts the principle that the value of one property may be derived by comparing it with prices achieved from market transactions of similar properties.  It is widely used in straightforward residential, rural and commercial real property.
• Income approach: This approach is used to value properties that are let to produce an income for an investor.  There are two main methods that falls under this approach and these are the investment and profits methods.  The investment method utilizes the net rental income received from the property and a capitalization factor which is usually the yield.  The profits methods on the other hand is used for properties whose values are derived from the trading potential of the business for which the building is expressly designed such as hotels or cinemas.  Comparable is used to derive values for the key inputs in the discounted cash flow (DCF) valuation that includes net rent, yield, growth rate, discount rate, costs and disposal price.
• Cost Approach: There are two methods under this approach.  There is the replacement cost/contractors method and the residual method.  The replacement method is used to value properties that rarely exchange hand on the open market for example public buildings, stadium etc.  It is hard to get direct comparable evidences for these properties.  Such valuation is based on depreciated cost of the building element and the value of the land.  The residual on the other hand is used to assess the value of a development site.  It combines elements of the income and cost approaches.  It requires calculation of the value of the completed development that will be reached by comparison with market transactions.  The assessment of the development costs requires comparison to be made with build costs, fees, finance costs and other elements in similar project.

The various sources of comparable evidences include but not limited to the following:

• Direct transactional evidencee. a direct sale or rent that recently took place. This is considered to be the best and most reliable source of evidence.
• Public information which should be used with caution and an understanding of how and from where it has been derived. For example, published data in the real estate magazines.  This will reveal a price but may lack other factors which may have material impact on the transaction concerned including the existence of a special purchaser or circumstances resulting in a forced sale.  Also the information may be outdated.
• Databases that can provide a general background to values and market trends. This information may need the valuer’s personal experience and further analyses.
• The press. This information maybe more recent than databases however valuer’s must bear in mind that transactions are often not reported enough information for the valuer’s needs and the reliability of reported particulars can vary widely.  This information should therefore be verified using enquiries and further specifics.
• Asking price. This by itself cannot provide trustworthy evidence of value and should be treated with caution.
• Sale price is a good source of market evidence if the valuer is aware of a recent transaction concerning the property being valued and knows that the transaction has been undertaken in open market and the particulars of the incentives are known.

Real estate is the land and all things that are a natural part of the land such as trees, minerals etc. and things that have been attached to the land such as building and site improvements. It also contain all permanent building attachments such as mechanical and electrical plant providing services to the building both below and above the ground” whereas “Real property on the other hand are the rights, interests and benefits related to the ownership of real estate.  It includes any negative rights, interests or benefits such as obligations, encumbrances or liabilities relating to the interest being valued.