An Appraisal is a thought process leading to an opinion of Value which is arrived at through a formal process that typically uses the three ”common Approaches to Value”; the Cost Approach which is what it would cost to replace the improvements, less physical deterioration and other factors, plus the Land Value; the Direct Comparison Approach which involves making a comparison to other similar properties which have recently sold and is normally considered the most accurate indicator of Value; and the Income Approach, which typically utilized when appraising income producing properties (i.e. rental properties) and estimating what an investor would pay based on the income produced by the property.