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<br />VALUATION METHODS <br /> <br />The appraiser uses any or all of three classic methods of estimating <br />value. These methods are well established and accepted in the appraisal <br />profession. <br /> <br />Market Comparison Approach to Value: <br /> <br />The Market Comparison Approach to Value makes use of data relating to <br />recent sales of similar properties. The subject property is then <br />compared to these sold properties, and adjustments are made to indicate <br />differences in such characteristics as desirability of location, size, <br />improvements, condition, etc. If adequate data is available due to an <br />active market, this method offers a true reflection of the market place <br />by demonstrating What buyers are actually paying for similar properties. <br /> <br />Cost Approach to Value: <br /> <br />The Cost Approach to Value is developed by estimating :the cost to <br />reproduce the improvements today, using accepted cost manuals. The <br />improvements are then depreciated, considering the present condition and <br />market acceptability. A local multiplier is applied to indicate <br />relative costs in various parts of the state. The value o!. the land is <br />then added. <br /> <br />Income Approach to Value: <br /> <br />The Income Approach to Value . is based upon the amount of income the <br />subject property is capable of producing. Value is determined by <br />estimating how much a typical investor would be willing to pay for the <br />future income derived from the property. This method is qui te useful in <br />estimating value of commercial property if the data is available to the <br />appraiser. <br /> <br />-5- <br /> <br />44.' -. .. ~:. . <br />.......:. ___..:.~"".""i":'.. "" <br />