1. Value, Cost, Equalization
Scott D Johnson ICA RES
Vanguard Appraisals, Inc.

2. Assessment Process Valuing Process Cost vs Value
Creating Equity and Uniformity
Equalization

3. Assessment (IAAO Glossary 2nd Edition)
(1) In general, the official act of determining the amount of the tax base.
(2) As applied to property taxes, the official act of discovering, listing, and appraising property, whether performed by an assessor, a board of review, or a court.
(3) The value placed on property in the course of such act.

4. Assessors Duties Discover Real Estate List Land Improvements Value
Market Value

5. Visual Interview Governmental Policy Discover
In Person (Driving the County)
Aerial Photography (orthorectified)
Oblique Photography (Pictometry)
Interview
Property Owner
Mailings
Governmental Policy
Building Permits
Building Inspection

6. Visual Interview Governmental Policy Listing
In Person (Driving the County)
Aerial Photography (orthorectified)
Oblique Photography (Pictometry)
Interview
Property Owner
Mailings
Governmental Policy
Building Permits
Building Inspection

7. Valuing a Property Cost Approach Income Approach
Automotive Prices (MSRP)
Sale Price?
Income Approach
Savings Accounts vs CD’s vs Stocks
Interest Rate?
Comparable Sales Approach
Used Tractors (Brand, Hours, Transmission, Horse Power & Drive Train)
What is it worth?

8. The Valuation Process Review Sales Land Value Cost Level
Manual Level, Index, Local Multiplier
Depreciation
Location Adjustment
(Map Area, Neighborhood, Location)

9. Arms Length Sale Arm’s-Length Transaction
A sale between a willing buyer and a willing seller that are unrelated and are not acting under duress, abnormal pressure or undue influences.
A sale between two unrelated parties, both seeking to maximize their positions from the transaction.

10. Cost of a Property vs Market Value
Replace Cost New – Depreciation = Market Value
Depreciation Formula;
Sale Price – Land = Market Value of Improvements
RCN – Market Value of Improvements = Dollar amount of depreciation
Depreciation in Dollars / RCN = Depreciation as a % (percentage)

11. Example
Example;
Dwelling built in 1967 sold for $100,000 (includes the land)
Sale Price ($100,000) – Land ($10,000) = Dwelling Value ($90,000)
RCN of Dwelling is $180,000 – Dwelling Value $90,000 = $90,000 (Depreciation in Dollars)
$90,000 / $180,000 = .50 or 50% depreciation

12. Equity & Uniformity Level of Assessment Equal to similar properties
Listed Correctly (Data)
Quality
Quantity
Condition (Effective Age)

13. Equity or Equalization
Equity between property owners
Equity between classes of properties
Vertical Equity
Horizontal Equity

14. What Effects Value? Location, Location, Location Size Age Style
Quality
Materials
Workmanship
Quantity
Layout
Design

15. Adjustments Land Adjustments Improvement Adjustments Underdeveloped
Excess Frontage
Topo
Vacancy
Improvement Adjustments
Overbuilt
Functional Obsolescence (Internal)
Economic Obsolescence (External)

16. Ad Valorem Tax
Ad Valorem Tax—A tax levied in proportion to the value of the thing(s) being taxed. Exclusive of exemptions, use-value assessment provisions, and the like, the property tax is an ad valorem tax.

17. Property Taxes
Should you adjust property values due to amount of property taxes?

18. Research

19. Uniformity Clause

20. Assessment Process
After determining if the real or tangible personal property is subject to tax, the property must be assigned a value.
In assigning a taxable value, property must be assessed
(determining taxability and a taxable value) and equalized
(comparing valuations of similar property to ensure fair
and equal treatment in the assessment process), pursuant to the uniformity clause.
CLAUSE IN PRACTICE
proportion of taxes than a
taxpayer with similar property.

21. Board of Equalization
The county board of equalization, composed of members
of the county board, equalizes the property within the county by correcting any current assessments that are 
deemed undervalued or overvalued. The county board of 
equalization also hears any taxpayer protests regarding 
property valuations, equalization, and other matters.

22. Agricultural Land
The Good, Bad and Ugly!

35. How to Value Agricultural Land?
Market Value with a Factional Assessment Level?
Productivity (Income Approach)?
Cap Rates Iowa 7%, North Dakota 4.95%, South Dakota 6.6%

36. Questions and
Maybe Answers

37. Enjoy the rest of the Conference!
Thank you!
Enjoy the rest of the Conference!