The Valuation Process
The Valuation Process
Definition of the Problem
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Identification of real estate |
Identification of property rights to |
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
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General (Region, city and neighborhood) Social Economic Government Environmental |
Specific (Subject and comparables) Site and improvements Cost and depreciation Income/expense and History of ownership |
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
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Land as though vacant Property as improved Specified in terms of use, time, and market participants |
Land Value Estimate
Application of the Three Approaches
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Cost |
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.