Extraction Method

[Artemis Fowl]

Or simply read the AI Text "Land valuations" by Boykin.

Sitting on my desk as we speak.

 

[Joe Flacco]

Gotta look at valuation problems in different ways and then reconcile the different ways of looking at it. That's what appraisal is. You look at your opinion of value different ways with the three approaches to value and reconcile. You look at adjustments different ways and reconcile. No different with site vales. You look at it different ways and reconcile. Only looking at it one way it may not make sense looking at it different ways. Which is why you end up with people saying things like adjustments don't have to be correct or reliable it just has to be supported. You have to look at problems different ways and have it make sense from multiple points of view. Otherwise you end up with opinions that don't make sense from different points of view.

Also, raw land sale prices do not equal site value. The 1004 form does not say Land Value. It says Opinion of SITE VALUE. But you guys know this already.

 

[BRCJR]

In my opinion, you have support for your opinion of site value.

 

[Joe Flacco]

It is good support for the extraction method.

 

[Joe Flacco]

But it looks like the "less contribution of improvements" subtracts replacement cost new instead of depreciated cost of improvements.

 

[Pittsburgh Pete]

Sitting on my desk as we speak.

Your chair broken?

 

[alebrewer]

It only takes the subject property to do extraction. It's allocation that takes multiple observations. Extraction is basically doing a cost approach backwards - estimate the contributory value of the improvements, then subtract that number from the market value of the property and you have the site value estimate. Easy peazy.

 

[Joe Flacco]

It only takes the subject property to do extraction. It's allocation that takes multiple observations. Extraction is basically doing a cost approach backwards - estimate the contributory value of the improvements, then subtract that number from the market value of the property and you have the site value estimate. Easy peazy.

That is not correct.

 

[Mr Rex]

Moan back.

 

[alebrewer]

That is not correct.

From The Appraisal of Real Estate (and I quote): Extraction is a method of estimating land value in which the depreciated cost of the improvements on the improved property is estimated and deducted from the total sales price to arrive at an estimated sale price for the land." Praytell, Joe, tell me what you've been misled to believe extraction is?