What is Abstraction in Real Estate?

In real estate valuation, abstraction is a method of determining the value of land, apart from any improvements to that land.

This basic approach starts with an acceptable sale price. The value of the building and all other improvements is then subtracted from that sales price.

For example, a four-bedroom ranch home sells for $200,000. The appraiser estimates that the building and other improvements are worth about $140,000.

Subtracting that from the sale price, the appraiser estimates that the land portion of the real estate is worth about $60,000.

For more information, see also the following entries:

• :Appraisal:
• :Appraiser:
• :Improvements:
• :Land:
• :Ranch House:
• :Real Estate:
• :Sale Price: