The process of performing an appraisal report consists of an estimation which forms an opinion of value. There are three "common approaches to value" which assists the appraiser arrive at this opinion or valuation. One of the three is the Cost Approach - which is how much capital would be required to replace the improvements, less physical deterioration and other factors, plus the land value. The Sales Comparison Approach involves searching for comparable houses in the vicinity and finding value based on comparing those houses to the property in question. Generally speaking, the Sales Comparison Approach is the most accurate indicator of market value of a home. The Income Approach is mainly used for finding the market value of income-producing properties based on what an investor would pay based on the amount of capital a property would bring in.