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![](3D"slide0001_image002.gif")
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I. Basic Concepts of Appraisal
•An appraisal is an unbiased estim=
ate
of the nature, quality, value, or utilit=
y of
an interest in or aspect of, identified real
estate as of a specific date. Value is the principal goal of an appraisal.
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A. Value
•<=
/span>Various types of value exist.
Since the purpose and use of an appraisal may vary, the different types of value must be understood. Types =
of
value are:
•=
MARKET VALUE (Objective Value=
) Defined as “the most p=
robable
price in cash, terms equivalent to cash, or in other precisely revealed terms, for which the appraised property =
will sell in a competitive market under all conditions
requisite to a fair sale, with
the buyer and seller each acting prudently, knowledgeably and for self-interest, and assuming that neit=
her is under undue duress”.
Based on “willing buyer” – willing, seller” concept. N=
ot to
be confused with price or cost.
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•a. Ma=
rket
Value – The worth or expected price that should result in the market place.
b. Price – Amount of money paid =
to the
seller. Price
can equal to, less than, or greater than “Market Value”.
c. Cost – Total dollar expenditu=
re for
labor, materials, financing, profit and
other expenses to acquire and develop a specific
property. An improved
property’s cost is seldom its market value.
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Utility or Use Value
•Utility or Use value is Subjective, not obvious =
or
visible value. The value in use i=
s to
an owner, or a particular owner. Special use or special
purpose buildings are could be churches, a city
hall, a post office, a museum, buildings that =
were
built for a particular purpose. There are few buyers. A properties utility
value is seldom its market value.
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Investment Value
•Value of an investment to a particular investor based on his or =
her
investment requirements. <=
/span>The highest price a particular investor would pay to satisfy his or her investment goal.
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Insurance Value
•The amount of insurance that may or should be carried on destructible portions of a property to indemnify the owner in the event of loss.
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Assessed Value
•<=
/span>Value set by the county tax assessors office for tax rolls in ad valorem (according to value) taxation.
•=
Generally the assessors office appraises property well below market value to prevent the tax payer from validating legitimate complaints.
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Liquidation Value
•Price that an owner is compelled to accept when the property’s sale must occur with less-than-reasonable market exposure.
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Four Elements of Value
• Keyword is
DUST
•Where
DUST stands for the first letter of each of
the following elements of value.
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Four Economic Factors
•Four interdependent economic fact=
ors
must be present to create value:
•1. Demand – People need it or want it.
•2. Utility – Usefulness
•3. Scarcity – Must be limited in availability
•4. Transferability – must be easy to transfer from one person to
another.
another.
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Basic Forces Influencing Value
=
=
=
Value of real estate is created, maintained, modified and destroyed by the interplay of four basic factors:
<=
/span>
1.PHYSICAL and ENVIRONMENTAL FORCES - These may be natural or man-made and include:
<=
/div>
=
=
a. Climatic conditions <=
span
style=3D'font-family:"Times New Roman";mso-ascii-font-family:"Times New Ro=
man";
font-size:88%'>(snowfall, rainfall, temperature, humidity)<=
/span>.
b. Topography and soil.
=
c. Natural barriers to future
development (rivers, mou=
ntains,
oceans).
d. Primary transportation
systems.
e. Nature and desirability of
immediate area. =
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Social Ideals and Standards
•Population characteristics exert primary force.
a.Population
growth and decline.
b.Rate
of births, divorce and deaths.
c.Attitudes toward
education, recreation and life style.
=
;
d.Age
distributions.
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Economic Forces
•Relationship of
population’s purchasing power and c=
urrent
and expected supply and demand conditions.
a.Supply Characteristics – Relationship of population’s purchasing power and current and expected supply and demand conditions.
•b. Demand Characteristics –
Employment, wage levels, price level=
s,
cost and availability of credit.
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Political and Governmental Forces=
•Government influences many important elements
in land-use patterns.
• a.<=
span
style=3D'mso-tab-count:1;width:2.18%'> Public Services
<=
/div>
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• b.<=
span
style=3D'mso-tab-count:1;width:1.9%'> Zoning, building and health
codes.
• c.<=
span
style=3D'mso-tab-count:1;width:1.96%'> National, state, and local f=
iscal
policies.
• d.<=
span
style=3D'mso-tab-count:1;width:1.64%'> Legislation – Rent control,
environmental protection, regulation of lenders.
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1. Amenities
Beneficial
elements within the homes themselves, as well as proximity =
of
desirable businesses, recreation and
entertainment.
Conditions
of agreeable living or a beneficial influence from =
the
location or improvements;
Pleasing
features, harmonious neighborhoods, attractively laid out communities,
desirable services
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2. Blighted Area
•A declining are in which real
property values are negatively affected by declin=
ing
economic forces, such as rapidly deteriora=
ting
buildings, heavy crime, inharmonious property
usages. These
are brought about by poor economic conditions with=
in
the area. Barriers, man made
and natural, rivers, freeways, act as buffers
or lines of demarcation, tending to stop the spread=
of
the blight.
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3. Building Restrictions and Zo=
nes
•Building restrictions act to
eliminate possibilities that could enhance,=
or
decrease values. Cities that are slow to approve projects
prove too costly an area to build new projects
in, leading to decline. Zoning ordinances
that are restrictive, prevent the building of nee=
ded
types of properties can deteriorate an =
area
leading to decline.
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4. Character of Soil
•=
Surface soil and sub-soils can affect the value of land as it may be too costly to cure undesirable soil conditions. When t=
he
cost is too high the value of t=
he
land declines in relation to its’ highest and best use.
•=
A. Soft =
sub
soil prevents large heavy buildings.
•<=
/span>B. Top so=
il may
be expansive making it necessary to use re-bar in concrete foundations, increasing <=
/span> building
costs.
•=
C. Clay =
and
adobe soils often prevent percolation, absorpt=
ion
and lead to costly drainage cures.
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5. Character of Business Climate
•Larger metropolitan areas require apartments, homes, commercial shopping areas, business districts, shopping malls, light industrial areas, and heavy industrial areas as well as warehouse districts for the storage of goods that are to be sold at a later time.
<=
/span>•The business climate of smaller areas demand =
substantially less building types, perhaps the grocery store houses the post office with the gas station in front of the building.
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6. Conspicuousness
•The ability for more consumers to see or view the property makes the property more valuable.
•Corner lot influence people can see a business from =
two streets, and often when they are stopped waiting for a traffic light to change.
This is known as corner i=
nfluence.
•Sites near freeway off-ramps are premium locations. We have seen a chan=
ge
in the off-ramp location b=
ecoming
very desirable to Automobile Malls and regional shopping centers.
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7. Directional Growth
•All cities have a greater growth in one direction or =
another if they are growing.
This is because the u=
tilities,
sewers and such are already in progress, or being expanded, it is less expensive to build in that direction for a time, then the direction becomes too far away and the expansion starts in one of the other three directions. =
•Properties in the path of growth increase in value <=
/span>more rapidly than those in slower growing directions.
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8. Exposure
•Older concepts with downtown areas dictated that the shopper preferred =
the
shady side of the street to shop on. Lots on the South or West side of the =
street
tended to demand mo=
re
value for retail areas.
•At an intersection the South West corner is the more desirable location as it gets the morning sun, but it is generally cool in the morning, and it gets very little afternoon sun, not to mention that the sun tends to be more in the South, then shining its rays more to the north.
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9. Location
•The most important factor with re=
al
estate is its’ location. It has been said that there are three
primary elements in the value of real estate,
“Location, Location, Location”.
1. Quality of the neighborhood.
2. Proximity to freeways.
3. Well planned, uncontested, traffic flow.
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10. Grades
•=
The topography of the land creates or destroys value. If
the land is sloped, it is less usable than level land, more costly to build on, but may be more in demand <=
/span>because of views.
• 1. Cost
of grading and retaining walls are important conside=
rations
on hillside lots.
• 2. Level land tends to be
monotonous.
• 3. Rolling
hills can create pleasing sites, but at the same ti=
me
flooding problems.
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11. Obsolescence
•=
Obsolescence really means obsolete, something from <=
/span>the past that isn’t as desirable to use as something more modern.
•=
Caused by technological advances, economic changes, decreasing functional utility, changing social patterns or expectations.
•=
1 Bathroom homes –
•1=
Car
Garage homes
•=
Inadequate street parking
•L=
arge
lots
•=
Outdated electrical boxes
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12. Orientation
•Orientation has to =
do
with the way a building is l=
ocated
on its’ lot. This has to do with =
the
current preference for the
building in relation to the sun, the street it is located
on, a view that may exist, in relation to a noisy
area adjacent to the property, and the buildings
relationship to the other properties on the street, for example if all the front doors are facing <=
/span>toward the street, a poor orientation would have a <=
/span>property with the backyard facing the street and the front yard facing the neighbors backyard.
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13. Plottage
•Plottage is an added value to an owner who owns two or more properties that are adjacent to each other. This ads to=
the
utility of the larger lots.
•Plottage value can exist when the properties are close, for example an office building of a trucking =
company, with the storage yard for the trucks immediately across the street would add value to the user as they could look directly across the street to see if a truck had left, or arrived.
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14. Private Restrictions
•=
Private restrictions occur most often when developers and subdividers put restrictions on the use of property for the benefit of all of the owners in the subdivision. Examp=
les
are the same type of gates in Planned Unit
Developments and Condominiums to maintain
continuity.
•=
Private owners can put private restrictions on property that they have owned.
The most common are restrictions on=
the
sale of alcohol, but sometimes the removal of tree=
s or
markers are restricted.
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15. Size
•Width and depth of parcels help
determine their possible use. When the lots are uniform the
value tends to be supported, when the lots are
smaller, there is normally a loss in value, when
lots are larger than the other lots in a neighborhood
they should demand a greater price.
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16. Shape
•Most lots are rectangular. Rectangular lots lend
themselves to the maximum use of the land. Irregular lots are common in cul-de-sacs,
and when streets or natural barriers prevent the lots
from being subdivided into rectangular
lots.
•Lots generally achieve the greate=
st
value when they are rectangular.
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17. Thoroughfare Conditions
•The size of the street fronting on
property can be an advantage, or a
disadvantage. A wide, four
lane highway in front of a shopping center would be=
an
advantage, and consequently there would be a gre=
ater
value. When
there is a busy boulevard bordering on a residential
property, the property suffers.
•Thoroughfare conditions sometimes=
add
to the value, and with some types of
property busy boulevards detract from the prope=
rty
value.
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18. Utilities
•On and offsite services for gas, electricity, telephone, water, sewer are important factors that contribute or detract from value depending on the circumstances.
•Availability, cost, type of utility available. In areas where natural gas are available heating and cooking =
bills are lower. W=
here
electricity is the only available utility, =
cost
of homes may be depressed if a=
lternative
heating and cooking sources are available and more desirable.
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19. Utility
•Utility is the usefulness of the
property. The immediate
usefulness gives property greater value, the more
useable the property the greater value.<=
span
style=3D'mso-spacerun:yes'> An example would be a residence
that is in a good neighborhood would be worth =
more
than the identical home that is on two =
or
three acres but is 30 miles from any busine=
ss
areas, or a long distance from areas wher=
e it
is possible to earn a living.
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20. Unearned Increment
•An unearned increment is any incr=
ease
in value due to no action or effort =
on
the part of the owner. An example could be an owner has
a lot in a rural area and unknown to the owner
the largest shopping center is planned to
be built 3 blocks from the property, the property
doubles in value, this would be an unearned increm=
ent.
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II. Principles of Value
•Understanding the Principles of Value is essential to an understanding of the purpose, techniques, and procedures of valuation.
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A. Principle of Supply & Demand
• 1. Desire
influences demand and can be =
created through education and
advertising.
•
• 2. Desire
has to supported with buying =
power.
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B. Principle of Change
Change
is the law of cause and effect. T=
he situations
existing today that will influence the use
of real estate tomorrow, the need for certain types
of real property in the future. T=
he appraiser
must attempt to interpret future trends and
influences that will ultimately affect the value,
and often the use of real estate.
•There are three Sub-Principles:
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=
1. Princ=
iple
of Integration
and Disintegration
and Disintegration
•All property goes through three stages:
•
•a. I=
ntegration
– development
•b. Eq=
uilibrium – Static Stage
•c. D=
isintegration – Decline or Decay
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2. Principle of Regression
•If unlike properties are constructed in the same neighborhood,
the value of the better property will be less
because of the lesser properties, and the
value of the lesser properties would increase.
•Better Property - Regresses In Value
•Lesser Property - Increases In Value
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3. Principle of Progression
=
Progression
is the opposite of Regression. When
unlike properties are constructed in the same
neighborhood, the less valuable property will
be worth more than it would in a neighborhood with similar
properties.
Likewise
the more valuable properties value would suffer fr=
om
the presence of less valuable homes or buildi=
ngs.
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Principle of Substitution<=
/div>
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•The Principle of Substitution simply states that when
two commodities are identical the=
cost
of the less expensive commodity will=
set
the value of that commodities future sales
price.
•In other words a person would not pay more for <=
/span>a
similar commodity that they could purchase for
less.
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Principle of Highest & Best U=
se
=
The use that would produce the greatest net return to the l=
and and improvements of a subject property over a given period =
of time.
Net returns are normally in money, but they can be in ameni=
ties
as well.
1.If the land use is
contrary for the neighborhood the property is not
normally achieving the highest and best use.
2. When
existing improvements are profitably functioning, a more
profitable use may be temporarily delayed. insufficient
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Principle of Balance
•Holds that value is maximized when a profitable =
equilibrium
is maintained in any neighborhood. That
is to say if a neighborhood has too many shopping
centers non will really profit.
•
•Ultimately the weaker will experience a change of
use and the balance will be achieved.
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Theory of Surplus Productivity
=
Any surplus of net income that is remaining after deducting=
the
costs of Labor, Coordination, Capital, and
Land.
1. LABOR=
wages of
property’s employees, labor is first to be satisfied.
2. COORD=
INATION
• Expenses
of Management, taxes, insurance, and expenses of managem=
ent.
• Costs
of interest and capital on loans invested in the improvements, the =
repayme=
nt of
or maintenance of those loans.
4. LAND&=
#13;
The cos=
t of
the land. Land is last to be sati=
sfied.
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Principle of Increa=
sing
&
Decreasing Returns<= /span>
Decreasing Returns<= /span>
<=
span
style=3D'position:absolute;top:31.25%;left:6.92%;width:87.26%;height:7.5%'=
>States that larger amounts of capital invested will increase the returns. When the optimum amount of capital is invested the greatest returns are achieved. If more capital is invested the returns will not increase, the returns will decrease.
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Principle of Contribution<=
/div>
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•Same as principle of increasing and Decreasing <=
/span>Returns
but is applied to only a portion of the improvements. A swimming pool costing =
$30,000
does not necessarily increase the value of
the home $30,000.
•The Principle of Contribution simply says that <=
/span>what
you invest in a property may or may not increase
the value proportionately to the contribution.
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Principle of Competition
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•Derived from the fact that profit tends to
breed competition and exc=
ess
profit tends to breed ruinous competition.
•EXAMPLE: The first grocery store in a new=
and
expanding residential area may have a near
monopoly which results in hi=
gher
than normal profits. This brings =
in other competition, sometimes to an extent that the area cannot support the number of stores built and the older and less desirable ones fail.
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Principle of Conformity
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=
=
Holds that maximum value is realized when a <=
span
style=3D'position:absolute;top:35.0%;left:6.92%;width:95.88%;height:6.0%'>=
reasonable degree of sociological, architectural and =
economic similarity exists.
•1. Go=
vernment
regulates conformity with zoning and building codes.
=
2. Comme=
rcial
shopping centers are usually made up of stores catering to customers with similar income=
s =
or
demands.
=
3. Resi=
dential
neighborhoods comprised of homes of similar style, size and design.
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III. The Valuation Process
•A systematic procedure employed by the appraiser
to answer the client’s request concerning the
value of a particular property. &=
#13;
•
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A. Definition of The Problem
Sets the limits of the appraisal and sets forth the
following:
<=
span
style=3D'font-size:88%'>1.IDENTIFICATION OF T=
HE
PROBLEM
<=
span
style=3D'font-size:88%'>2.PROPERTY TO BE
VALUED
<=
span
style=3D'font-size:88%'>3.DATE
<=
span
style=3D'font-size:88%'>4.USE
<=
span
style=3D'font-size:88%'>5.DEFINITION OF
VALUE
<=
span
style=3D'font-size:88%'>6.OTHER LIMITING
CONDITIONS
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1. IDENT=
IFICATION
OF THE PROBLEM – Legal Description and
address.
1.PROPERTY TO BE VALU=
ED –
Type of value, value of the fee si=
mple
estate, leasehold, mineral r=
ights,
air space, easement, etc.
2.DATE – The date of
value, and the date of the report.
=
<=
span
style=3D'font-size:88%'>3.USE – Specifies the=
use
of the appraisal.
4.DEFINITION OF VALUE=
– A
definition of the value sought is pla=
ced
in that appraisal, Market V=
alue,
Value in Use, Going Concern Value, etc.
5.OTHER LIMITING
CONDITIONS – Appraiser expresses any limit=
ing
conditions that will or may limit the conclusio=
n of
the appraisal.
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Preliminary Analysis
The
Preliminary Analysis considers the character and s=
cope
of the appraisal and amount
of time and work required to gather pertinent
data.
1.General
Data – All social economic, government and
environmental influences.
2.Specific
Data – Physical, locational, cost, and income and
expense information.
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![](3D"slide0052_image004.gif")
The Appraisal Proce=
ss
1. Define the Problem
2. Plan the Appraisal
3. Collect and Analyze the
Data
Gener=
al
Data
Data
Subje=
ct
Property Data
Property Data
Compa=
rable
Property Data
Property Data
Highest & Best Use Analysis
Land Value Analysis=
4. Apply the Value Approaches
Sales
Comparison
Approach
Approach
Cost<=
br>
Approach
Incom=
e
Approach
Approach
5. Arrive at a Value
Conclusion
6. Report the Value Conclu=
sion
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Highest and Best Use Analysis
•The Highest and Best Use concept looks at=
the
land by itself to
•ascertain whether or not the land could be
used more profitably.
•
•For example if you had a strawberry farm =
on
seven acres near
•Disneyland in Anaheim, California, what w=
ould
be the highest
•and best use of that land.
•
•The land lent itself more profitably to a
hotel as the income was
•a greater as a hotel than as a strawberry
farm.
•
•Eventually the land=
was
sold to a hotel chain and a hotel was built there.
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Highest and Best Use Analysis
<=
/div>
The Highest and Best Use concept then is looked at from
=
;
Two basic prospective;
1. LAND =
AS
THOUGH VACANT – this identifies
compares similar properties =
and
their current use in an attempt to e=
valuate
the value of the land without an improvement.
<=
span
style=3D'font-size:75%'>2.PROPERTY AS IMPROVE=
D –
when compared to
• land as=
if it
were vacant compares the land with and
without the current
improvement, but more it looks at the possibility of another use and helps determine which use creates the greatest value for the land.
<=
span
style=3D'font-size:75%;visibility:hidden'>1.
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Land Value Estimate
Since
the land value is at least contributive to the
value of an entire improvement, it is often desirable
to value the land separately.
We
have seen that the Highest and Best Use of Land
requires a different analysis.
Land
is normally valued using the comparison approach
to value. Comparable sales of lan=
d are compared
to the land of the subject property, a value
is concluded.
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Application of The
Three Approaches
=
=
When necessary and possible the three classic approaches to=
value are used;
1. SALES
COMPARISON APPROACH – Compares recent
sales of
similar properties to arrive at a value.
2. INCOME
CAPITALIZATION APPROACH – Estimates the
=
Net Ope=
rating
Income, the income after expenses of operation and vacancy factors and capitalizes that
income with a reliable Capitalization Rate.
<=
span
style=3D'font-size:75%;visibility:hidden'>1.
<=
/span>
=
3. COST
APPROACH – The cost approach evaluates the present=
value
of the improvements on the land, adjusted for depreci=
ation,
and adds the land value to the current improve=
ment
value.
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Reconciliation of Value Indication
The
appraiser evaluates all of the data and methods
used to arrive at value, and decides which method, a=
nd
which data contributed to the greatest extent=
to
the value conclusion.
1. Usually one methods contribu=
tes
the most reliable value conclusion and the appraiser indicates that method.
<=
/span>
•2. Appraising is NOT an averaging of values.
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Report of Defined Value
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=
=
The final step is the reporting of the defined value. There are three kinds of recognized written reports;
=
1. Letter
Report – The letter report consists of a letter certificate =
indicat=
ing
the value estimate, the date, description of the propert=
y and
any limiting conditions.
=
2. Form =
Report
– A standard form, such as the URAR (Uniform Resi=
dential
Appraisal Report) designed by and for
the use of a financial institution, insurance company, or
government agency.
=
3. Narrat=
ive
Report – An extensive report with complete documen=
tation
of pertinent data.
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Appraisers
•Appraisers handling “federally related
transactions” must be licensed by=
the
Office of Real Estate Appraisers in he st=
ate
in which they practice appraisal. =
In California the Office of Real Estate Appraisers is =
most often referred to as “The OREA”.
•Federally related matters most often elud=
es
to the fact that there is a loan
involved that is insured by an institution with a
federal charter, or is insured by the FDIC, (Federal Deposit
Insurance Corporation.)
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Four State Licenses
=
There are four state licenses issued by each of the 50 stat=
es
in the Union.
<=
/span>
1.Trainee – may appra=
ise
properties which supervising a=
ppraiser
is permitted to appraise.
2.Licensed Residentia=
l –
may appraise 1 – 4 unit residential p=
roperties
to a maximum value of $1,000,000.
3.Certified Residenti=
al –
may appraise 1 – 4 unit residential of any value;
non-residential up to $250,000.
4.Certified General –=
may
appraise any property they have an e=
xpertise
in.
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Professional Associations<=
/div>
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Slide 1
Slide 1
=
=
=
Appraisers normally belong to a professional organization.<=
span
style=3D'mso-spacerun:yes'> This gives them a source of education, associative familiarity, and recogniti=
on
for experience.
=
Appraisal Institute – Organization formed when American
Institute of Real Estate Appraises and
Society of Real Estate Appraisers merged in 1991.
a. MAI
(Member, Appraisal Institute) – designation of AIREA members.
<=
/div>
=
b. Code of
Ethics prohibits basing fee on percentage of final value estimate; =
not
disclosing interest, if any, in property being appraised; disclosing confide=
ntial
portions to anyone other than client.
c. SREA (=
Senior
Residential Appraiser) – Designation of SREA members.
<=
span
style=3D'font-size:63%;visibility:hidden'>•
<=
/span>
=
There a=
re
many appraisal designations that are not covered in this section. The various designations would indicate experience =
in
certain areas.
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Fee Appraiser
•Fee appraisers are independent
contractors. That is they work for themselves, doing appraisals for many =
different lending institutions.
The fee appraiser presents samples of
his/her work to a lender and after presenting samples =
of
their work to various lending institutions those
lending institutions will place that appraiser on a list=
of
approved appraisers. When the lending institution needs an appraisal done they will select one of the appraisers who is on their list of =
approved appraisers.
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In-House Appraisers or Employee
=
The
in-house appraiser is an appraiser who works
for one lender. They are part of =
the
staff of that lending institution. They can do field appraisals. They often do ‘review appraisal”, that
is they review the work of Fee Appraisers who
do the bulk of the appraisals for the institution.
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Market Analysis
The real estate market is influenced by the opinions,
attitudes, motivation, and
interaction of buyers and sellers.
These buyers and sellers are in turn subject to many social=
, economic, government and environmental influences, the appraiser must thoroughly understand the market or markets =
relevant to the assignment.
A market analysis identifies and studies a pertinent market.
This study should make the appraiser more aware, and more <=
/span>accurate in the value they are seeking, and ultimately
reporting to the public.<=
/span>
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Types of Markets
=
There are five broad categories of markets;
1.Residential – the
principle residences of owners and renters.
These are grouped in
from 1 unit to 4 units, and then looked at with different appraisal eyes as the units exceed 4.
=
;
2.Commercial – Office=
s,
stores, loft buildings, parking g=
arages,
motels, hotels, shopping centers.
<=
span
style=3D'font-size:75%'>3.Industrial – Factor=
ies,
warehousing, mining.
<=
span
style=3D'font-size:75%'>4.Agricultural – Past=
ure,
crops, timer, ranch or orchard.
5.Special Purpose –
Parks, churches, cemeteries, public u=
tilities
and government properties.
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Neighborhood Analysis
=
•<=
span
style=3D'font-family:"Times New Roman";mso-ascii-font-family:"Times New Ro=
man"'>Neighborhood
is that section of community where occupants
have common interests, whether it be
sociological, economic, or environmental.<=
span
style=3D'mso-spacerun:yes'> There are four basic sources or forces
that contribute to the personality of a neighborhood.
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Social
=
Social contributions to a neighborhood are powerful =
forces that create and sustain neighborhoods as they exist.
<=
span
style=3D'mso-special-format:nobullet;display:none'>•Social contributions are ever evolving, changing, so that their contribution consistently causes change.
=
Some of the social contributions are population density, educational lever, education expectation, age level, crime and attitudes toward crime, quality of medical care, cultural and commercial services.
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Economic
•Financial capacity, and financial expecta=
tion
of the occupants of that
neighborhood. The financial capac=
ity of
the occupants to own, or rent, attitudes
about the maintenance of the
property, expectation of renovation of the property in their neighborhood. Considers incomes of the occupants of the neighborhood, if low, the maintenance =
and improvement of the neighborhood are not likely, =
=
property falls into disrepair, occupants that can afford maintenance move to maintained neighborhoods rather than =
improving the property there.
The probability of new, economically
contributing property being built in the neighborhood are not likely.
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Governmental
•Zoning codes, building codes, the enforce=
ment
of those codes, tax burden, =
fire
and police protection. The attitude of the
inhabitants concerning law enforcement, the political involvement of the immediate population =
in the running of their government. Attitudes =
concerning illegal activities, the demand for better, =
more contributive government involvement that is beneficial for the greater number of the inhabitants of =
that neighborhood. These
are powerful deterrents, or powerful allowances=
of
desirable or undesirable conditions that do
exist in neighborhoods.
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Environmental
Natural or man made features of the neighborhood will contribute to the use and function of the various activates=
of
that neighborhood.
<=
/span>
Size of buildings, open space, or crowded housing all
contribute positively or
negatively to a neighborhood.
When the occupants of that neighborhood are aware of positi=
ve =
and negative influences, and they demand the best use of th=
e land, then we find better neighborhoods, more desirable neighborhoods, more valuable neighborhoods.
Finally, the people in the neighborhood really create and <=
/span>maintain the stature of that neighborhood.
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District Analysis
=
=
Multifamily, commercial and industrial areas are usually
referred to as districts, not
neighborhoods.
=
1. Apart=
ment
District – Buildings design and d=
ensity
lend a great influence <=
span
style=3D'mso-tab-count:1;width:5.72%'> to the social structure and
stability of the neighborhood.
=
2. Comme=
rcial
District – a grouping of stores along a business street; a <=
span
style=3D'mso-tab-count:1;width:4.87%'> regional or neighborhood sho=
pping
center or downtown central business <=
span
style=3D'mso-tab-count:1;width:5.72%'> district.
=
=
3. Indust=
rial
District – Containing manufacturing or warehousing firms. <=
span
style=3D'mso-tab-count:1;width:5.51%'> Value affected by available =
public
utilities, labor, and materials distribution facilities.
=
4. Agric=
ultural
Districts – May be defined by size of farms, crops grown, or soil types, not to mention proximi=
ty to
and availability of purchasing markets.
=
5. Other
Districts – May consist of offices, medical facilities, high technol=
ogy or
educational facilities.
<=
span
style=3D'font-size:63%;visibility:hidden'>2.
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Commercial District
Expanded Analysis
•Regional Shopping Centers – Contains 40 to
100 stores, or more, extensive
parking and over 250,000 square feet of gross lease=
able
area. Favorably affects surrounding land values and use with additional, smaller, but contributive shopping centers, land values increase because of the presence of the regional =
shopping center.
•100% locations eludes to the perfect or c=
ore
of the store groupings – the best
location.
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Commercial continued
•Community Shopping Center –
=
Smaller
than regional shopping center. An=
chor tenant
is usually a variety store, or junior department
store.
Neighborhood
Shopping Center – Center containing ten =
or
more stores, usually a supermarket, dr=
ug
store and service establishments.
•
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Land or Site Evaluation
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Appraisal may be used to establish value of land only or la=
nd
and improvements. Land must be identified, factors influ=
encing
value must be ascertained and final value
estimate made.
Highest and Best Use Concepts – is the land currently being
used for its’ highest and
best use, would another use be more profitable, benefit=
the
community more?
Land Abstraction Techniques – part of the cost approach to =
value. Estimates the depreciated value of the improvements,=
comparables establish the overall value, and the adjusted <=
/span>improvement value is subtracted from the total value indica=
ting
a land value.<=
/span>
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