-23-
Similarly, Mr. White was aware that the subject property was
designed as a monastery and knew the subject property was sold
because it was not self-supporting as a monastery. Despite this
overwhelming evidence, Mr. White did not adjust his values for
functional obsolescence. We believe Mr. White’s valuation under
the cost approach does not appropriately account for these
essential elements.
Mr. White concluded under the cost approach that the value
of improvements to the subject property was approximately
$414,000. Mr. White then added this value of the improvements
under the cost approach to the value of the land he found under
the sales comparison approach to conclude that the fair market
value of the subject property was $475,000 as of the contribution
date.
Mr. White’s methodology and omissions trouble us. We
believe that respondent’s expert’s methodology is more thorough
and consistent with appraisal methodology. Respondent’s expert
relied on two separate analyses of the subject property, one
under the sales comparison approach and one under the cost
approach, instead of applying each approach to value a portion.
Respondent’s expert then compared and reconciled the value
conclusions under each approach to reach one overall conclusion
of value, ultimately deciding to give more weight to the sales
comparison approach. See American Institute of Real Estate
Appraisers, The Appraisal of Real Estate 65, 598-603 (12th ed.
2001). Accordingly, we place less weight on petitioners’
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