building appraisal report
DESCRIPTION
Introduction Title Page Transmittal Letter Table Of Content : 1. Summary 2. Survey 3. Calculation 4. ConclusionTRANSCRIPT
PREPARATION OF BUILDING APPRAISAL REPORTPREPARATION OF BUILDING APPRAISAL REPORTPREPARATION OF BUILDING APPRAISAL REPORTPREPARATION OF BUILDING APPRAISAL REPORT
SEMESTER : VIISEMESTER : VIISEMESTER : VIISEMESTER : VII
• Name : FAIRUZName : FAIRUZName : FAIRUZName : FAIRUZ
• ROLL NO : BARC/8008/10ROLL NO : BARC/8008/10ROLL NO : BARC/8008/10ROLL NO : BARC/8008/10
• SUBJECT : SEMINARSUBJECT : SEMINARSUBJECT : SEMINARSUBJECT : SEMINAR
• SEMESTER : VIISEMESTER : VIISEMESTER : VIISEMESTER : VII
INTRODUCTIONINTRODUCTIONINTRODUCTIONINTRODUCTION
• Documentation / Report Documentation / Report Documentation / Report Documentation / Report prepared by professional
appraiser to determine the value of building property.determine the value of building property.determine the value of building property.determine the value of building property.
• Prepared when a person wants to buy a building propertyperson wants to buy a building propertyperson wants to buy a building propertyperson wants to buy a building property
• It tells the homeowner if the purchase is a good deal or the purchase is a good deal or the purchase is a good deal or the purchase is a good deal or
not.not.not.not.not.not.not.not.
• The report is also submitted to lenders, who can use the
valuation of the home to determine whether to grant the determine whether to grant the determine whether to grant the determine whether to grant the
loan.loan.loan.loan.
•After making a careful evaluation making a careful evaluation making a careful evaluation making a careful evaluation of the specific item
being appraised and the market conditions, the appraiser appraiser appraiser appraiser
writes his appraisal report. writes his appraisal report. writes his appraisal report. writes his appraisal report.
• In it he specifies the appraised value of the item. He also
specifies his methodology used to arrive at that valuemethodology used to arrive at that valuemethodology used to arrive at that valuemethodology used to arrive at that value
TITLE PAGETITLE PAGETITLE PAGETITLE PAGE
It should include following data :
• Property name and
identification
• Address or location of the
property being appraisedproperty being appraised
• Name and address of the
client
• Name and address of the
appraiser
• Effective date of the valuation
• Date of report preparation
IntroductionIntroductionIntroductionIntroduction Letter of transmittal includes :Letter of transmittal includes :Letter of transmittal includes :Letter of transmittal includes :
• It presents the appraisal report presents the appraisal report presents the appraisal report presents the appraisal report to the
client.
• Letters of transmittal are drafted in drafted in drafted in drafted in
• Property name or identification
• Effective date of the value estimate
• Type of value estimated
LETTER OF TRANSMITTALLETTER OF TRANSMITTALLETTER OF TRANSMITTALLETTER OF TRANSMITTAL
• Letters of transmittal are drafted in drafted in drafted in drafted in
proper business styleproper business styleproper business styleproper business style
• It is the part of an appraisal report & it
should not be confused with cover page
• The letter of transmittal is used to provide used to provide used to provide used to provide
a permanent recorda permanent recorda permanent recorda permanent record for identifying the
writer and intended reader
• Type of value estimated
• A statement providing location of the
property and a brief description
• Statement that all investigation and
analysis are done by appraiser
• Final estimation
• Signature of the appraiser.
LETTER OF TRANSMITTALLETTER OF TRANSMITTALLETTER OF TRANSMITTALLETTER OF TRANSMITTAL
LETTER OF TRANSMITTALLETTER OF TRANSMITTALLETTER OF TRANSMITTALLETTER OF TRANSMITTAL
TOWN HOUSETOWN HOUSETOWN HOUSETOWN HOUSE
TABLE CONTENTTABLE CONTENTTABLE CONTENTTABLE CONTENT
SUMMARY
SURVEY
CALCULATION
CONCLUSION
SUMMARYSUMMARYSUMMARYSUMMARY
• Provides summary of
the appraisal problem,
factors considered,
analyses performed,
and conclusions
reached.reached.
• Everything is
presented in bullet
form with brief
statements made
about each topic
covered.
SUMMARYSUMMARYSUMMARYSUMMARY
SURVEY : SURVEY : SURVEY : SURVEY : Market Analysis Market Analysis Market Analysis Market Analysis
• Located in Southern
portion of City
Lawrence, Kansas
Location
Lawrence, Kansas
• Lawrence is accessible
via interstate 70 on the
north & highway k-10
on the south which is a
major four lane highway
connecting Lawrence &
suburban Kansas city
SURVEY : SURVEY : SURVEY : SURVEY : Market Analysis Market Analysis Market Analysis Market Analysis
� Estimated population of
the city of Lawrence for
1990 was 65,608 persons1990 was 65,608 persons1990 was 65,608 persons1990 was 65,608 persons
� Lawrence Public school
consist of 15 elementary 15 elementary 15 elementary 15 elementary
schools,schools,schools,schools, 4 junior high & 2 4 junior high & 2 4 junior high & 2 4 junior high & 2
� 2010201020102010 year year year year information
indicates approx. 36,739 36,739 36,739 36,739
householdshouseholdshouseholdshouseholds
Population : Employment :Education :
1990 was 65,608 persons1990 was 65,608 persons1990 was 65,608 persons1990 was 65,608 persons
� In year 2000 In year 2000 In year 2000 In year 2000 the
estimated population was
80,098 (22 % increase 22 % increase 22 % increase 22 % increase
from year 1990 )
� In year 2010 In year 2010 In year 2010 In year 2010 the
estimated population was
87,643 ( 9% increase 9% increase 9% increase 9% increase
from year 2000 )
schools,schools,schools,schools, 4 junior high & 2 4 junior high & 2 4 junior high & 2 4 junior high & 2
high schoolshigh schoolshigh schoolshigh schools
� Haskell's Indian Nation
University & the university of
Kansas are the 2 university 2 university 2 university 2 university
present in Lawrencepresent in Lawrencepresent in Lawrencepresent in Lawrence
� Local & cultural attraction
includes Clinton Lake & Clinton Lake & Clinton Lake & Clinton Lake &
Perry LakePerry LakePerry LakePerry Lake
present.present.present.present.
householdshouseholdshouseholdshouseholds
� It indicates 57% of 57% of 57% of 57% of
householdshouseholdshouseholdshouseholds in Lawrence
have income greater have income greater have income greater have income greater than
$ 35.000$ 35.000$ 35.000$ 35.000
� Unemployment has
historically been in 3% to
5% but due to economic due to economic due to economic due to economic
conditions, it higher at conditions, it higher at conditions, it higher at conditions, it higher at
present.present.present.present.
• Table shows the historical results historical results historical results historical results
from 2001 to 2012from 2001 to 2012from 2001 to 2012from 2001 to 2012 in the city
Lawrence
• There has been a drop in the drop in the drop in the drop in the
smaller size residential smaller size residential smaller size residential smaller size residential
SURVEY : SURVEY : SURVEY : SURVEY : Building Permit AnalysisBuilding Permit AnalysisBuilding Permit AnalysisBuilding Permit Analysis
smaller size residential smaller size residential smaller size residential smaller size residential
construction industry in last few
years
• Multifamily has not seen a drop Multifamily has not seen a drop Multifamily has not seen a drop Multifamily has not seen a drop
other than from the major ramp
up year 2008 to now
• Multifamily increaseMultifamily increaseMultifamily increaseMultifamily increase is due to
attractive interest rated that are
present available
� Site is 152,460 square feet &
long rectangular in shaperectangular in shaperectangular in shaperectangular in shape
� Terrain is level to gently
sloping
� Access is via seven curb cuts
SURVEY : SURVEY : SURVEY : SURVEY : Site DescriptionSite DescriptionSite DescriptionSite Description
Access is via seven curb cuts
on the south side of West
26th Street.
� Consists of mixed zoningmixed zoningmixed zoningmixed zoning
� Eastern side Eastern side Eastern side Eastern side consists of
commercial building commercial building commercial building commercial building while
WesternWesternWesternWestern side side side side consists of
residential buildingsresidential buildingsresidential buildingsresidential buildings
SURVEY : SURVEY : SURVEY : SURVEY : Environmental ConsiderationEnvironmental ConsiderationEnvironmental ConsiderationEnvironmental Consideration
SURVEY : SURVEY : SURVEY : SURVEY : Flood Hazard MapFlood Hazard MapFlood Hazard MapFlood Hazard Map
SURVEY : SURVEY : SURVEY : SURVEY : Description Of ImprovementDescription Of ImprovementDescription Of ImprovementDescription Of Improvement
• It gives the detailed detailed detailed detailed
descriptiondescriptiondescriptiondescription of building
property
• It mainly gives the details details details details
of building materialof building materialof building materialof building material used by of building materialof building materialof building materialof building material used by
the building property
• Appraiser informs about
the changes needed to be changes needed to be changes needed to be changes needed to be
done in the building done in the building done in the building done in the building
property
• Appraiser estimates the estimates the estimates the estimates the
costcostcostcost for building property
• The apartment buildings are wood frame construction with painted lap siding and a small portion being brick.
• The foundations are all concrete slab on grade construction.
• The roofs are pitched and covered with asphalt shingles.
• Interior inspection of the subject did not indicate any areas of roof leakage
• Each unit has central air conditioning and forced air gas heat along with a 40 gallon hot water heater.
SURVEY : SURVEY : SURVEY : SURVEY : Description Of ImprovementDescription Of ImprovementDescription Of ImprovementDescription Of Improvement
• Each unit has central air conditioning and forced air gas heat along with a 40 gallon hot water heater.
• Interior space is partitioned utilizing drywall construction.
• In addition, the property does not feature water sprinkler fire protection systems.
• Floor coverings in the units are a combination of vinyl, carpet and tile.
• Walls and ceilings are generally painted drywall.
• Bathrooms feature a stool, tub/shower insert, medicine cabinet, towel bars, exhaust fan etc
• Kitchens have stainless steel sinks, disposal, adequate wood cabinets, electric range, refrigerator and dishwasher.
• The landlord provides a washer/dryer set for all of the subject units. Each of the units has a 40 gallon gas fired
hot water heater
SURVEY : SURVEY : SURVEY : SURVEY : Description Of ImprovementDescription Of ImprovementDescription Of ImprovementDescription Of Improvement
SURVEY : SURVEY : SURVEY : SURVEY : Floor PlansFloor PlansFloor PlansFloor Plans
Single bedroom 615 sq. ft Two bedroom 800 sq. ftSingle bedroom 615 sq. ft Two bedroom 800 sq. ft
Two bedroom 1150 sq. ft Three bedroom 1556 sq. ft
SURVEY : SURVEY : SURVEY : SURVEY : PhotographsPhotographsPhotographsPhotographs
SURVEY: High And Best Use ConclusionSURVEY: High And Best Use ConclusionSURVEY: High And Best Use ConclusionSURVEY: High And Best Use Conclusion
HIGH AND BEST USE CONCLUSION
• The site is located at West 26th Street in the southern portion of Lawrence.
• The site contains an estimated 152,460 square feet or 3.50 acres.
• The subject is rectangular shaped in configuration and access is via seven curb cuts on the south side of West 26th Street.
• The site is generally level to gently sloping and has all utilities available for development.
• The building property has a mixed zoning
• Eastern side of the building consists of commercial building while western consists of multi dwelling residential building
• Both zoning designations would allow for multifamily development.
• Therefore the eastern portion of the site would allow for retail, office and multifamily and the western portion allow for Therefore the eastern portion of the site would allow for retail, office and multifamily and the western portion allow for Therefore the eastern portion of the site would allow for retail, office and multifamily and the western portion allow for Therefore the eastern portion of the site would allow for retail, office and multifamily and the western portion allow for
multifamily developments.multifamily developments.multifamily developments.multifamily developments.
HIGH AND BEST USE CONCLUSION
CALCULATION : Valuation MethodologyCALCULATION : Valuation MethodologyCALCULATION : Valuation MethodologyCALCULATION : Valuation Methodology
• The process of determining the value of a building property is known as Valuation Valuation Valuation Valuation
Methodology.Methodology.Methodology.Methodology.
• The traditional methods of processing market data into a value indication include:
IIII Cost Approach Cost Approach Cost Approach Cost Approach IIII Sales Comparison Approach Sales Comparison Approach Sales Comparison Approach Sales Comparison Approach IIII Income Capitalization ApproachIncome Capitalization ApproachIncome Capitalization ApproachIncome Capitalization Approach.
1.1.1.1. COST APPROACH : COST APPROACH : COST APPROACH : COST APPROACH :
• It is an approach in which total cost of the property is estimated by summing up the cost summing up the cost summing up the cost summing up the cost
of land and structureof land and structureof land and structureof land and structure
• Basic steps in the cost approach are :
a) Estimate land value as though vacant and available to be put to its highest and best use
b) Estimate reproduction or replacement cost of structures
c) Estimate accrued depreciation
d) Deduct depreciation from reproduction or replacement cost
e) Add depreciated reproduction or replacement cost to the value of the land
•• It involves the comparison with the
subject property of similar properties
that have recently been sold or similar
properties currently on the market.
• The sales comparison approach
focuses on the similarities and
CALCULATION CALCULATION CALCULATION CALCULATION : Sales Comparison Approach: Sales Comparison Approach: Sales Comparison Approach: Sales Comparison Approach
focuses on the similarities and
differences among comparable sales
that affect value
• A total of five sales of multifamily
buildings in Lawrence were included
in this report
• Selection where on the basis of their
location, size, design and features
CALCULATION CALCULATION CALCULATION CALCULATION : Sales Comparison Approach: Sales Comparison Approach: Sales Comparison Approach: Sales Comparison Approach
• Introduce this section with a
summary of the income
approach and its foundation,
including the principle of
anticipation.
• Include a discussion of the
CALCULATION : INCOME APPROACHCALCULATION : INCOME APPROACHCALCULATION : INCOME APPROACHCALCULATION : INCOME APPROACH
Include a discussion of the
theoretical basis and the
relationship of the income
approach to the highest and
best use of the property.
• Points out income and
expenses
• Estimates conversion of
improvements suggested in the
highest and best use section is
reflected within this approach..
INCOME APPROACH: INCOME APPROACH: INCOME APPROACH: INCOME APPROACH: Net Operating IncomeNet Operating IncomeNet Operating IncomeNet Operating Income
CONCLUSIONCONCLUSIONCONCLUSIONCONCLUSION