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significant adjustments to each of the parcels used as
comparables. The SDM was also the principal method applied by
petitioner's experts. Based on the lack of true comparable sales
in the area, and both parties' primary reliance on the SDM, we
too rely primarily on the SDM in determining the value of the
Property.
Fair Market Value Under the Subdivision Development Method
Although all the experts used the SDM in determining the
fair market value of the Property, each used slightly different
factors and values in his analysis. Of the four experts, Mr.
Avery presented the most comprehensive SDM in terms of the number
of pertinent factors considered. Therefore, we find his
methodology appropriate as a general framework for our
determination of the value of the Property.
Many of the factors that make up the subdivision development
analysis are determined by the individual expert's knowledge,
experience, and judgment. As a result, many of the values
assigned to these factors differ from expert to expert.9 The
9However, the value differences among the expert reports for
inflation rate, discount rate, and most of the development
expenses are slight. Based on all the evidence presented, we
determine the following values for these factors: (1) Inflation
rate equals 12 percent per year; (2) discount rate equals 11
percent per year; (3) marketing expenses equal 5 percent of total
sales; (4) real estate taxes equal $500 per lot; (5) legal
expenses/closing costs equal $700 per lot; (6) engineering costs
equal $1,500 per lot; and (7) developer's overhead and profit
(continued...)
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