1. Comparative Analysis – These slides selected by Prof
Comparative Analysis – These slides selected by Prof. Clapp to emphasize the most important parts of this chapter.

2. Quantitative Adjustments
Data analysis techniques
Paired data analysis – Sales with and without a feature
Statistical analysis – Many sales with and without a feature
Graphic analysis – Many sales presented in a graphic presentation
Chapter 19

3. Agricultural Land Sales
Price
Acres
Price per Acre 1
$400,000 70
$5,714 2
$500,000 90
$5,556 3
$550,000
103
$5,340 4
$600,000
110
$5,455 5
$700,000
135
$5,185 6
$775,000
150
$5,167 7
$805,233
155
$5,195 8
$896,543
175
$5,123 9
$985,700
195
$5,055 10
$1,000,000
200
5,000 11
$1,256,500
230
$5,463 12
$1,125,890
250
$4,504 13
$1,258,900
285
$4,417 14
$1,358,000
310
$4,381 15
$1,580,000
366
$4,317
Chapter 19

4. Price per Acre
Chapter 19

5. Quantitative Adjustments, continued
Capitalization of income differences
GRMs
Direct capitalization of a single year’s income
Chapter 19

6. Sequence of Adjustments
Property rights conveyed- typically select comps with same rights conveyed as the SS.
Financing terms- typically same as the SS.
Conditions of sale- typically same as the SS.
Expenditures immediately after purchase- typically none.
Market conditions – adjust for time because comps sold at some time in the past, and you want to value the SS today.
Property adjustments- this is where most adjustment occcurs.
Chapter 19

7. Sequence of Adjustments
$100,000 +
($100,000 × 0.10)
10,000
Adjustment 1 −
Adjustment 2
Adjustment 3
Adjustment 4
$100,000 +
($100,000 × 0.10)
× 1.10
Adjustment 1
$110,000 −
($110,000 × 0.10)
× 0.90
Adjustment 2
$99,000
($99,000 × 0.10)
Adjustment 3
$108,900
($108,900 × 0.10)
Adjustment 4
$98,010
Chapter 19

8. Transactional Adjustments
Real property rights conveyed
Life estates
Leased fee, leasehold, subleasehold
Mineral rights
Financing terms
Low interest rate mortgage assumptions
Conditional sales contracts
Purchase-money mortgages
Seller-paid concessions
Chapter 19

9. Transactional Adjustments, continued
Conditions of sale
Motivated sellers
Motivated buyers
Related parties
Sales of adjacent properties
Sales with only one buyer or only one seller
Expenditures made immediately after purchase
The sale price of the property plus the new roof or new HVAC system
The sale price plus the cost of demolition of the building
Chapter 19

10. Transactional Adjustments, continued
Market conditions
Compensate for changes in the market from the date of sale to the effective date of appraisal
Make the value opinion equal to the effective date
Analyze sales and resales of the same properties
Chapter 19

11. Property Adjustments Location
Compensate for differences in the locational attributes of the subject property and the comparables
Adjustment can be based on land values
Chapter 19

12. Property Adjustments, continued
Physical characteristics
Size of site and building
Condition, quality, and age of improvements
Property amenities
Functional utility
Economic characteristics
More or less rent
More or less expenses
Legal characteristics
Non-realty components of value
Chapter 19

13. Review Exercise 10. Suggested Solution
Sale
Lot
Gross Building
Price per
Price
Frontage
Depth
Area (sq. ft.)
Front Foot
Sq. Ft. of Land
Sq. Ft. of GBA 1
$1,597,530
335
489
45,000
$4,768.75
$9.75
$35.50 2
$1,358,987
300
410
38,500
$4,529.96
$11.05
$35.30 3
$1,258,963
400
35,000
$3,147.41
$7.87
$35.97 4
$1,112,598
245
333
32,000
$4,541.22
$13.64
$34.77 5
$1,000,000
275
405
29,000
$3,636.36
$8.98
$34.48 6
$987,654
370
415
28,700
$2,669.34
$6.43
$34.41
Subject
444
455
28,000
Rounded to
$35.00
Chapter 19

14. Review Exercise 11. Suggested Solution
Sale
Lot
Gross Building
Price per
Price
Frontage
Depth
Area (sq. ft.)
Front Foot
Sq. Ft. of Land
Sq. Ft. of GBA 1
$125,987
200
246
15,000
$629.94
$2.56
$8.40 2
$135,897
210
250
18,000
$647.13
$2.59
$7.55 3
$145,800
285
22,000
$729.00
$6.63 4
$99,000
195
20,000
$507.69
$2.54
$4.95 5
$128,589
255
24,500
$642.95
$2.52
$5.25 6
$175,000
339
25,000
$875.00
$2.58
$7.00
Subject
275
Rounded to
$2.55
Chapter 19