ABSTRACT
The Real estate assessment is highly complex, and its accuracy can be influenced by data collection techniques and various types of errors. Traditional methods of appraisal include market method, cost approach and income method. Basic principle of market method is substitution principle, through which real estate price is estimated by selecting comparable real estate and modifying dierent index. Market method is widely used with high credibility, but in practice the various indicators of each real estate are rarely exactly the same, so they often need to be corrected, hence the market is aected by man-made factors greatly. The income approach is one of present value method, which is future income oriented. Its reliability depends on the reasonable assessment of the future earnings and capitalization rate whereas the uncertainty nature of future earnings method results in the inherent defects of the income approach. In cost method, real estate is valued by replacing cost, however the cost is not equal to the market value which must consider the market supply and demand, and therefore the cost value collectively refers to the intermediate results for complement.
