The three common methods used by property appraisers to estimate property values are the:
1. Comparison sales method: The comparison sales method bases a property's value on the recent sale prices of properties within the same area and comparable in size, quality, amenities, and features.
2. Income method: The income method is used to estimate the value of an income-producing property based on the net income the property produces.
3. Replacement cost method: The replacement cost method is based on what it would cost to replace the improvements on property using similar construction materials and construction methods.
FORM 12.1 Sample Property Appraisal Report Checklist
1. Is the purpose for the appraisal accurately stated in the appraisal?
2. Is there a certificate of value included with the appraisal?
3. Does the appraisal include a summary of conclusions?
4. Does the appraisal analysis identify significant trends?
5. Does the appraisal focus on the factors affecting the property's value?
6. Does the appraisal describe the economic base?
7. Does the appraisal describe the property's neighborhood?
8. Does the appraisal describe neighborhood trends?
9. Does the appraisal contain errors in mathematical computations?
10. Does the appraisal contain errors in land, area and building sizes?
11. Does the appraisal include an adequate history of the property?
12. Do the photographs contained in the appraisal adequately show the property?
13. Is the appraisal written in a clear, concise, complete, consistent and factual manner?
14. Does the appraisal outline both the negative and positive features of the property?
15. Does the appraisal contain inconsistencies between the market comparison, income and replacement cost methods, remaining economic life and depreciation?
16. Were recent comparable sales used in the appraisal?
17. Was special financing used in any comparable sales?
18. Were more than three comparable sales used in the appraisal?
19. Were comparable property sale locations similar to the subject property being appraised?
20. Were all comparable sales data fully analyzed and adjusted?
21. Is the subject property compatible with other properties in the area?
22. Are comparable sales locations being put to their best use?
23. Was the market data used to calculate the capitalization rate selected from similar properties within the same market area?
24. Were vacancy and rent collection losses and operating expenses included in calculating the capitalization rate?
25. Does the current market data support the capitalization rate?
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