6.0. SR 04-27-1998 - Laserfiche WebLink

Home Browse Search

9786-3 16 BE~FORE VALUE S_ales Comparison Approach to Value The sales comparison method is the most common way of developing a market value estimate for land. In the sales comparison method, sales of vacant land comparable to the subject property are gathered and analyzed. The sales prices are adjusted for time, location, physical characteristics and other relevant variations. The adjusted prices are reduced to some common unit of comparison, such as price per acre or per square foot. The appraiser analyzes this information and derives a unit value applicable to the subject property. When applied to the appropriate unit measure, this value results in an estimate of the market value of the land as if vacant. The validity of this approach is based on the assumption that a continuity exists between similar properties of like adequacy and their market values. The reliability of this technique is dependent upon the availability of sales data and the degree of comparability of the sales analyzed. The unit of comparison most applicable to residential lots is price per lot. This holds true even when rural residential lots are involved which are 2.5 - 10 acres in size. Wide variations in price per acre are observed when comparing 2.5 acre lots to larger rural residential lots. However, little incremental value change is noted on a per lot basis. Wetlands provide a view and open space amenity, but do not contribute value on a pro rata per acre basis. This can be seen in the larger comparable sales in our grid which like the subject include a significant amount of wetland. The following sales were selected based on their comparability to the subject property. The sales were selected based on similarity in size, rural residential development potential, location in or near Elk River, and date of sale. The sales used are presented on individual write-ups, followed by a location map, adjustment grid and analysis. Patchin & Associates, Inc. VaLuation C'onsulta,,~.