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Definition of the Assignment

of client / intended users

Intended use of

Purpose of
definition of
Market Value)

Date of opinion
of value

Identification of
location and
property rights to
be valued)

Extraordinary assumptions


Scope of Work

Identify and confirm
with client regarding
the required level or degree of reliability
(level must be appropriate for the intended use)

Ensure the intended
Scope of Work
is sufficient to
meet the client's requirements (and
NOT result in a
misleading appraisal)

Verify the
Scope of Work
meets all requirements
of USPAP and the
Appraisal Institute

Identify and disclose
any unusual circumstances
that could adversely
impact upon the
appraisal process

Ensure that any
Assumptions and/or
Hypothetical Conditions
are appropriate and
market supported

Data Collection and Property Description

Market Area Data
General characteristics of region,
city and competitive market area

Subject Property Data
Specific characteristics of land and improvements, personal property,
business assets, etc.

Comparable Property Data
Sales, listings, offerings, vacancies, cost
and depreciation, income and expenses, capitalization rates, etc.

Data Analysis

Market Analysis
Demand studies
Supply studies
Marketability studies



Highest and Best Use Analysis
Site as though vacant
ideal improvements
Property as improved

Land Value Opinion

Primary Technique
Sales comparison



Alternative Techniques
Land residual
Direct (ground rent) capitalization
Yield (subdivision development Analysis) capitalization

Application of the Approaches to Value

Cost Approach
Replacements costs
Reproduction costs

Sales Comparison Approach
Quantitative analysis
Quanlitative analysis
Regression analysis

Income Capitalization
Income multipliers
Direct capitalization
Yield capitalization

Depreciation - physical,
functional & external

Reconciliation of Value Indications and Final Opinion(s) of Value

Appraisal Review
Check for consistency
Apply any “test for reasonableness”
Examine differences in value indications

Reconciliation Criteria
Accuracy or confidence in the data and adjustments process
Quantity of evidence

Development of Value Opinions
Define exposure period
Full discloseure of hypothetical conditions

Prepare the Written Appraisal Report

Appraisal Report
“Describes the appraisal findings
in a level of detail applicable
to the assignment”

Restricted Appraisal
“States the key findings
of the appraisal”

Formerly Used Terms
"Self-Contained" - Comprehensive
"Summary" - Summarized



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