Final answer:
The Sales Comparison Approach is the most commonly used method in residential property valuations, involving comparing the property with similar recently sold properties and adjusting for differences to estimate the property's value.
Step-by-step explanation:
When evaluating the value in residential real estate, the approaches used can be broadly classified into three categories: the Cost Approach, the Sales Comparison Approach, and the Income Approach. The Sales Comparison Approach is used most often in residential property valuations. This method relies on comparing the property in question with similar properties that have recently sold in the same area. Adjustments are made for differences between the properties to arrive at an estimate of value.
The utility-maximizing approach mentioned does not directly relate to the valuation of residential property in real estate terms, but rather to economic theory regarding consumer choice and the allocation of goods. In real estate, appraisers focus on market value, which centers around what a buyer would likely pay under prevailing market conditions.