03-13-17-R - Laserfiche WebLink

Home Browse Search

BRKW APPRAISALS, INC. PAGE 2 The Sales Comparison Approach can be used in appraising vacant land or improved properties (land wit h building). This approach involves comparing recent sales of land or improved properties which are reasonably similar to the property being appraised . Adjustments are made to the prices of the comparable sales for value - related differences relative to the subject property. The result is a reasonably narrow range of adjusted prices which indicate what the subject property likely would sell for if offered on the market. The range of value indications is reconciled into a final, single -point opinion of m arket value for the property within this valuation approach . The Income Approach involves determining market rent for the property, based on rent comparables from the market, and capitalizing an annual net income from that rent into a property value indic ation, based on parameters used by investors for similar properties. Property 1 – Former Public Works Site Since this property reflects vacant land, of the three primary approaches to value, the Sales Comparison Approach would be applied in valuing the land component of the subject property. The Cost and Income approaches would not be utilized because they typically are only applicable when the property contains improvements with contributory value. Though in some cases vacant land is leased, it is con cluded that there would likely be no demand for the subject property in terms of a land lease, given its location and other factors. The City has asked for four valuation scenarios for Property 1: 1. Value given development with commercial uses; 2. Value give n development with single -family residential uses; 3. Value given development with townhome residential uses; and 4. Value given development with multi -family residential uses. Typically land is appraised based on its highest and best use, which includes fou r main tests, all of which must be met in the following order : U ses that are legally permissible, phy sically possible, financially feasible and maximally productive (resulting in the highest value). Though an appraisal assignment for the subject land typically would not include a comprehensive feasibility study, typically it would include an analysis and discussion by the appraiser of general indications of demand and feasibility for a particular use , based on a review of market trends and appraiser experience ; such discussion and analysis would be followed by the appraiser’s opinion of the highest and best use, and the property would be valued based on that use.