Which of the following approaches is NOT used in appraisals?

The correct answer indicates that the exchange approach is not typically employed in appraisals, which is accurate. In real estate appraisal, the primary methods used to determine property value are the cost approach, the sales comparison approach, and the income approach.

The cost approach estimates the value of a property based on the cost to replace or reproduce it, minus any depreciation. The sales comparison approach analyzes recent sales of similar properties (comparables) to arrive at a value. The income approach evaluates the income-generating potential of a property, often used for investment properties where potential revenue and operating expenses are assessed.

In contrast, the exchange approach is not a recognized methodology in appraisal practice. It may refer to concepts like trade or barter transactions rather than systematically establishing property value based on market analysis or economic principles. Therefore, understanding the typical approaches used in appraisals highlights why the exchange approach does not fit into standard appraisal practices.