Approaches to Value Flashcards
5 things to sell to the client
AEIOU (Knowledge, Experience, Integrity, Objectivity, uncompromised willingess to do the work as agreed)
Valuation Process 7 steps
Define the problem Scope of Work Data Collection and Property Description Three Approaches Reconciliation & final opinion of value Report
Step 6: 3 approaches to value
Cost (reproduce)
Income/GMRM (rental income data)
Sales (3 comps)
Role of appraiser
To give an unbiased objective opinion of value
Define the Problem
1-Intended users
2-Intended Use
3-what is the value for? (market, investment, insurable etc)
4-what will be the effective date (date of the last inspection)
5-ID characteristics (location and property rights, fractional interests)
6-Assumptions & Conditions (extraordinary/hypothetical)
Step 2: Scope of work
What data do I need and where will i get it?
Who do I need to work with?
Make a time schedule with due date
Create a flow chart
Give client a proposal with fee and due date
Step 3: Data collection
Market area boundaries (geographic)
Comps (3 is best)
Subject (Title, Zoning, Assessed value, easements, size shape, topograhy, bldg orientation, utilities, surrounding use conformity)
Property value influencers
Social
Economic
Governmental
Environmental
market analysis
.Property productivity analysis Market delineation Demand analysis and forecast Competitive supply analysis and forecast Supply and demand study Capture estimation
highest and best use analysis
as though vacant or improved must meet all Four Tests: -Physically possible -Legally possible -Financially feasible -maximally productive
Income Capitalization
Income/Rate=Value
or
Income x Factor-Value
GMRM
Sale price/comp monthly rental=GMRM
Report types
Narrative (book type) & Oral (save notes)
fractional interests
air, subsurface rights etc
Lot & Block
land is divided into lots which are the legal description. first 13 states of usa do not use this
