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properties of the same type which sell close to the valuation
date, and that adjustments are made to the sale price of each
comparable property to ascertain the value of the property under
consideration. Comparable properties, the reports state, are
properties which compare to the property under consideration as
to time and condition of sale (with special emphasis on the
condition of the market), location, physical characteristics,
income characteristics, and terms of financing.
The reports also state that the income capitalization method
ascertains from market transactions the ratio of selling price to
net operating income at the time of sale in order to arrive at a
capitalization rate, and that this capitalization rate is applied
to similar property, on the basis of the similar property's net
operating income, in order to value it. As to the cost method,
the reports state, this method ascertains value through the
following three-step process: (1) The estimated value of the
land that is part of the property to be valued is ascertained
using the sales comparison method, (2) the cost to reproduce the
property under consideration is estimated at current costs, and
(3) the estimated land value is added to the estimated cost of
reproduction, less depreciation, to arrive at the value of the
property under consideration.
In applying the sales comparison method to each of the
apartment complexes, the appraisers could not find any sales in
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