The Valuation Process

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The Valuation Process

Definition of the Problem

1	2	3	4	5	6	7
Identification of real estate	Identification of property rights to be valued	Use of appraisal	Definition of value	Date of value estimate	Description of scope of appraisal	Other limiting conditions

Preliminary Analysis and Data Selection and Collection

General

Specific

Competitive Supply and Demand

(Region, city and neighborhood)

Social

Government

Environmental

(Subject and comparables)

Site and improvements

Cost and depreciation

Income/expense and
capitalization rate

History of ownership
and use of property

(The subject market)

Inventory of competitive properties

Sales and listings

Vacancies and offerings

Absorption rates

Demand studies

Highest and Best Use Analysis

1	2	3
Land as though vacant	Property as improved	Specified in terms of use, time, and market participants

Land Value Estimate

Application of the Three Approaches

1	2	3
Cost	Sales comparison	Income capitalization

Reconciliation of Value Indications and Final Value Estimate

Report of Defined Value

The is a global membership association of professional real estate appraisers, with nearly 24,000 members
and 91 chapters throughout the world. Organized in 1932, its mission is to support and advance its members as the choice
for real estate solutions and uphold professional credentials, standards of professional practice and ethics consistent with the public good.
The Appraisal Institute advocates equal opportunity and nondiscrimination in the appraisal profession and conducts its activities
in accordance with applicable federal, state and local laws. Members of the Appraisal Institute benefit from an array of professional education
and advocacy programs, and may hold the prestigious MAI, SRPA and SRA designations.