© 2013 All rights reserved. Chapter 12 Valuation Process and Pricing Properties1 New York Real Estate for Salespersons, 5th e By Marcia Darvin Spada Cengage Learning
© 2013 All rights reserved. Chapter 12 Valuation Process and Pricing Properties2 Chapter 12 The Valuation Process
© 2013 All rights reserved. Chapter 12 Valuation Process and Pricing Properties 3 Chapter 12 Key Terms Appraisal Assessed value Comparative market analysis Cost/direct cost/indirect cost Cost approach Depreciation Evaluation Functional obsolescence Income approach Insured value Investment value Market value
© 2013 All rights reserved. Chapter 12 Valuation Process and Pricing Properties 4 Chapter 12 Key Terms (continued) Mortgage value Plottage Price Sales comparison approach Valuation Value in use
© 2013 All rights reserved. Chapter 12 Valuation Process and Pricing Properties 5 Types of Value $ Market $ Investment $ Insurance $ Value in use $ Assessed $ Mortgage Most appraisals estimate market value
© 2013 All rights reserved. Chapter 12 Valuation Process and Pricing Properties 6 Evaluation Marketability studies Supply-and- demand studies Highest and Best use studies Land utilization studies Feasibility studies
© 2013 All rights reserved. Chapter 12 Valuation Process and Pricing Properties 7 Market Value, Price and Cost Price Purchaser pays; Buyer accepts Cost Dollar expenditure for property Direct cost Labor and materials Indirect costs Support items for project Market value Ideal value for property Comparison
© 2013 All rights reserved. Chapter 12 Valuation Process and Pricing Properties 8 Comparative Market Analysis (CMA) Analysis of the competition that a property will face upon sale attempts Properties currently on the market Recently sold properties Expired listings Withdrawn listings
© 2013 All rights reserved. Chapter 12 Valuation Process and Pricing Properties 9 Residential Market Analysis Residential Market Analysis Assets/ drawbacks Terms Market value range Competing properties Expired properties Buyer Appeal Market Position
© 2013 All rights reserved. Chapter 12 Valuation Process and Pricing Properties 10 Appraisal Approaches to Value Appraisal Unbiased estimate of value as of a certain date Sales comparison Cost Income
© 2013 All rights reserved. Chapter 12 Valuation Process and Pricing Properties 11 Appraisal Reporting Narrative Report Uniform Residential Appraisal Report (URAR) Reconciliation