Which type of appraisal is best used for unique properties that do not have comparable sales?

The Cost Approach is particularly effective for unique properties that lack comparable sales because it focuses on the cost to replace or reproduce the property, rather than relying on sales data from similar properties. This method involves estimating the current cost of constructing a replica of the property and then subtracting any depreciation.

In scenarios where a property is one-of-a-kind—such as specialized commercial properties or historic buildings—available comparable sales may be minimal or nonexistent. The Cost Approach allows appraisers to assess value based on the inherent characteristics of the property itself rather than market fluctuations or trends.

Additionally, this method is useful for insurance purposes and for properties that are not frequently bought and sold, providing a reliable estimate that reflects the investment required to recreate the property. By considering construction costs and potential economic factors, the Cost Approach helps establish a fair valuation when other methodologies may not offer applicable data.