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The Valuation Process

Definition of the Problem
1
2
3
4
5
6
7

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

Electronically reproduced with permission from The Appraisal of Real Estate, 11th edition. Copyright © 1996 by the Appraisal Institute, Chicago, IL.

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