Agenda - 09-02-2008 - 4e - Laserfiche WebLink

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VI. LAND VALUATION A. Approaches to Land Value There are several approaches available to the appraiser for The valuation of land. The basic approaches are the Market Data or Comparative Approach, the Abstraction Procedure, and Anticipated Use or Developmental Procedure, and the Land Residual technique. THE MARKET DATA APPROACH This approach requires the gathering, documenting, and analysis of sales data for comparable sites. Through the process of adjustment for hopefully minor differences between subject and comparables, an indication is developed of the most probable price at which the subject would sell if exposed to the open market. The market data approach is usually preferred and should be used whenever possible. It does require a reasonably active market; if market data is too meager, comparable properties being offered for sale may be helpful. However, offering prices should be used with extreme caution since they frequently have limited validity. Depending on local methods of reporting and recording, information on numerous sales can generally be assembled by contacting local realtors and researching public records (deeds, transfer map, MLS, etc. ) . Most often such data is reliable, however, some sales data will appear questionable and should be verified with conditions surrounding the sales determined before such sales are used. This is usually done by interviewing one or more of the parties directly involved in the transaction (grantee, grantor, or broker) . Information should then be documented as to location, size, shape, physical characteristics, date of sale, and price. _Having completed all this, the sales can be analyzed and comparisons made to the subject property on lump sum basis or by units of comparison (front foot, square foot, lot, or acre) . LAND VALUE BY ABSTRACTION This approach employs elements of the cost approach in the analysis of improved sales.