Page 2:
The income approach was considered but not completed. The cost approach was completed. See Page 3 for comments on each approach. The sales comparison approach is the best method of valuing residential property as it is a direct reflection of market activity. Range of pricing for similar properties is $550,000 (±) to $575,000. Adjusted indication range is $572k (±) to $580k. Bracket ($572k) given most consideration and rounded to $575k based on subjects favorable features.
Page 3:
Notes on the Cost Approach:
Land value developed using the sales comparison method. See exhibit addendum for land sales analyzed and comments below. Building costs estimated using the Marshall & Swift Cost Handbook (online - SwiftEstimator) for a good quality, two story residential structure. Effective age of 10 to 12 years; extended life method used to estimate depreciation. Additional items included a 4-stall, prefabricated horse barn with 6-rail portable corral and roof. In addition there is a 12' x 36' prefabricated storage building (used as an artist studio) with a small wood deck and shed roof. I have used the cost tables and methods published by the California Board of Equalizations Handbook AH 534 (2019 v.) at pages 13 and 22. See exhibit addendum. The cost approach is most reliable when the improvements are proposed or new, and this reliability can suffer as the age of the improvements increases due to difficulty in estimating depreciation from all sources. The cost approach resulted in a market value indication that is reasonbly similar to the market value indications in the Sales Comparison Approach.
Notes on the Income Approach:
The income approach was considered but was not necessary in developing credible assignment results for the intended use of this appraisal. Single family residential property on acreage is not typically purchased for it's ability to generate rental income.
Reconciliation of the sales comparison approach in the narrative comment section:
Reconciliation:
The range of market value indicators (sale prices after adjustments) is narrow given the quality and quantity of the available data. That range is $571,500 to about $580,000. The bracket is $572,000 which is similar to the MV indication from the cost approach. The subject has several favorable features including privacy, equestrian amenities, outdoor features, a larger size residence in good condition, and close proximity to the Russian River. I have given most consideration to the bracket of MV indications, rounded upward to $575,000 given the above listed features.
