VALUATION PROCESS
 

Step 1: Definition of the Problem Identify client and intended users Identify the intended use Type and definition of value Effective date of the value opinion Identify the characteristics of the property (including location and property rights to be valued) Assignment Conditions Extraordinary assumptions Hypothetical conditions

Step 2: Scope of Work

Step 3: Data Collection and Property Description Market Area Data General characteristics of region, city, and neighborhood 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.

Step 4: Data Analysis Market Analysis Demand studies Supply studies Marketability studies Highest and Best Use Analysis Site as though vacant Ideal improvement Property as improved

Step 5: Land Value Opinion

Step 6: Application of the Approaches to Value Cost Sales comparison Income capitalization

Step 7: Reconciliation of Value Indications and Final Opinion of Value

Step 8: Report of Defined Value

Adapted from The Appraisal of Real Estate, 12th edition (Chicago: Appraisal Institute, 2001), Fig. 4.1, p. 51.