Laserfiche WebLink
<br /> Page 44 Nagell Appraisal Incorporated | 952.544.8966 <br />SALES COMPARISON APPROACH – APARTMENTS ONLY <br /> <br /> <br />The Sales Comparison Approach to Value is predicated upon sales of properties with similar <br />characteristics as the subject. The primary premise of this approach is that the market value of the <br />subject is directly related to the prices of competing properties after adjustment. Adjustments are <br />made in an effort to account for significant differences. <br /> <br />Supply and Demand: Sales in the market result from negotiations between buyers, sellers and <br />lenders. Buyers reflect market demand and sellers supply. If demand is high, prices tend to increase, <br />if it is low, prices usually decrease. <br /> <br /> <br />Substitution: The principle of substitution holds that the value of a property tends to be set by the <br />price paid to acquire a substitute property of similar utility and desirability within a reasonable amount <br />of time (The Appraisal of Real Estate, 14th Edition). The Sales Comparison Approach is less reliable <br />if substitute properties are not available in the market. There are adequate sales to apply the sales <br />comparison approach and formulate a reliable indication of market value. <br /> <br />Balance: The market tends to force a balance between supply and demand. Balance can change <br />due to shifts in population, variations in purchasing power, consumer tastes and preference and time. <br /> <br />Externalities: When possible, select comparables with similar location, economic conditions and <br />support facilities. <br /> <br /> <br /> <br /> <br />Land Value: Land value is estimated as if the land were vacant and available for development to its <br />highest and best use. There are several different methods to analyze site values: sales comparison, <br />allocation, extraction, subdivision development, land residual, and ground rent capitalization. One or more <br />of these methods may be applicable depending on market conditions and the type of land. <br /> <br /> <br />The preferred and most reliable approach is the sales comparison; however, when sales data is very <br />limited, some of the other methods may be employed if appropriate data is available. For purposes of <br />this appraisal, the sales comparison method has been utilized. A number of sales were reviewed in <br />the subject marketing area. Of the data analyzed the most relevant sales were selected and used on the <br />following pages. <br /> <br /> <br /> <br /> <br /> The Following Outline Is Used In The Sales Comparison Approach: <br /> <br /> <br /> - A location map of the comparable sales. <br /> <br /> <br /> - Comparable sales are listed. <br /> <br /> <br /> - An adjustment grid using the comparable sales. <br /> <br /> <br /> - A discussion of adjustment and conclusion of value. <br />