Appraisal

Appraisals

Process

Define-apply different approaches-reconcile

Reports

Letter Form - Short Form -Narrative

Valuation

Principle of Substitution

Basis of 'Comparison' = Market Data = Substitution approach

Principle of Highest and Best use

Parcel of land

interim = current use

Site Approach

Principle of Conformity

Principle of Contribution

Remodel

Net effect on Income

Principle of Regression

Elements of Value

Demand

Utility

Scarcity

Transferability

Forces On Value

Governmental

Economic

Environmental and Physical Characteristics

Social Ideals

Additional Factors

Exposure

Topography

Orientation

Cost

cost equal value when improvements are new and Highest and Best Use

Market Price

Subject to financing conditions

Effective age.

Methods

Market Data Approach = Comparison = Comparative = Substitution Approaches

Appraise Amenities

Unit of Comparison

single family home

entire property

Rental Schedules

Features

Adjust value by subtracting value of the feature from the sales price of comparable

Cost Approach

Replacement Cost =

Estimate value of land

Front Foot Value

Cost / foot or Acre

Estimate Replacement Cost of Improvement

Cubic Foot

Warehouse

Square Foot

Exterior Dimension

Quantity Survey

detailed estimate = builders

Unit in Place

Subtract accrued depreciation

Obsolescence

External

Taxes, zoning

Social or Economic changes

Poor Sewer System

Airport Noise

Changes Supply and Demand

Nonconforming improvements near property

Noxious fumes

Internal

Poor Design

Old Kitchen

Old Heating

One car Garage

Changes in Construction Styles

Conditions

Curable

Incurable

Physical Deterioration

Wear and Tear

Deferred Maintenance

Add Value of Land

Specific Purpose Building

Capitalization Approach

Present Worth of future benefits

V = I/R

Calculate Annual Net Income

Economic Rent - Vacancies - taxes - insurance - utilities - reserves

Calculate Cap Rate

Comparison

Band of Investments

Summation

Gross Multiplier Approach

Sales Price of Comparable / Gross Monthly Income

Site Analysis not as important