Appraisal Institute
North Texas Chapter
Tel. 972-233-2244
Fax 972-239-6857
The Valuation Process

Definition of the Problem

 Identification of real estate

Identification of property rights tobe valued

Use of appraisal

Definition of value

Date of value estimate

Description of scope of appraisal

Other limiting conditions

Preliminary Analysis and Data Selection and Collection


(Region, city and neighborhood)






(Subject and comparables)

Site and improvements

Cost and depreciation

Income/expense and
capitalization rate

History of ownership
and use of property

Competitive Supply and Demand

(The subject market)

Inventory of competitive properties

Sales and listings

Vacancies and offerings

Absorption rates

Demand studies

Highest and Best Use Analysis

 Land as though vacant

Property as improved

Specified in terms of use, time, and market participants

Land Value Estimate

Application of the Three Approaches


Sales comparison

Income capitalization

Reconciliation of Value Indications and Final Value Estimate

Report of Defined Value

Electronically reproduced with permission from The Appraisal of Real Estate, 11th edition. Copyright 1996 by the Appraisal Institute, Chicago, IL.