THE VALUATION PROCESS
Definition of the Problem
Identification of real estate
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Identification of property rights to
be valued
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Use of appraisal
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Definition of value
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Date of value estimate
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Description of scope of appraisal
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Other limiting conditions
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Preliminary Analysis and Data Selection and Collection
General
(Region, city and neighborhood)
Social
Economic
Government
Environmental
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Specific
(Subject and comparables)
Site and improvements
Cost and depreciation
Income/expense and
capitalization rate
History of ownership
and use of property
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Competitive Supply and Demand
(The subject market)
Inventory of competitive properties
Sales and listings
Vacancies and offerings
Absorption rates
Demand studies
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Highest and Best Use Analysis
Land as though vacant
Property as improved
Specified in terms of use, time, and market participants
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Land Value Estimate
Application of the Three Approaches
Cost
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Sales comparison
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Income capitalization
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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.
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