What method is used by an appraiser who values a large piece of acreage without comparables, by subtracting the cost of improvements less depreciation from the sales price?

The correct approach in this scenario is known as abstraction. This method involves calculating the value of the land by focusing on the improvements made to it. An appraiser would take the sales price of the property and subtract the cost of improvements while accounting for any depreciation those improvements may have incurred. This allows the appraiser to isolate the land value from the overall property value when direct comparables are not available.

Abstraction is particularly useful in assessing larger pieces of land where there might not be sufficient comparable sales data to rely on. The process essentially allows the appraiser to derive a more accurate land value, reflecting the worth of the land itself independent of the structures present, to provide a clear picture of the property’s overall value.

Understanding this methodology is crucial, especially in situations involving unique parcels of land where standard appraisal techniques, like sales comparison, might not yield reliable data.