In what scenarios is an alternate valuation method often required?

An alternate valuation method is often required in scenarios where properties are unusual or lack sufficient comparable sales data. This situation arises because traditional appraisal methods typically rely on the availability of comparable sales to establish a fair market value. When a property does not have similar sales data due to its unique characteristics, such as being in a niche market or having distinct architectural features, appraisers need to utilize alternative approaches to derive an accurate value.

These alternate methods may include techniques such as the cost approach, which estimates the value based on the cost to replace the property, or the income approach, which assesses the property's potential income generation. By using these methods, appraisers can provide a more reliable valuation, reflecting the property's specific attributes rather than relying solely on comparable market data, which may not be applicable. This ensures that all properties, regardless of their uniqueness, receive an accurate and fair appraisal.