Scope of the Work:
This report represents our good faith effort to comply with the requirements of USPAP (Uniform
Standards of Professional Appraisal Practice) as found in the current applicable issue. These standards
contain rules and requirements that deal with the procedures to be followed in developing an appraisal,
analysis, or opinion of value.
The determination as to whether or not this, or any, report complies with USPAP cannot be
considered to be an objective fact. Compliance is rather a subjective determination which is based upon the
perception and interpretation by the client and review appraiser as to what constitutes compliance.
The "Appraisal Process" is used to estimate Market Value of the subject. The appraisal or
"Valuation Process" follows these steps; 1.) identify and describe the real estate being appraised; 2.) state the
real property interest being appraised; 3.) State the purpose and intended use of the appraisal; 4.) define the
value to be estimated; 5.) state the effective date of the report and appraisal; 6.) state the extent of the process
of collecting, confirming, and reporting data; 7.) state all assumptions and limiting conditions that affect the
analysis, opinions, and conclusions; 8.) describe the information considered, the appraisal procedures
followed, and the reasoning that supports the analyses, opinions, and conclusions. 9.) describe the appraiser's
opinion of the highest and best use of the real estate, when such an opinion is necessary and appropriate; 10.)
explain and support the exclusion of any of the usual valuation approaches; 11.) describe any additional
information that may be appropriate to show compliance with the guidelines of Standard 1 of the USPAP;
and, 12.) include a signed certification in accordance with Standards Rule 2 - 3.
The depth and detail of the process of collecting, confirming, and reporting the salient facts of this
appraisal include the researching of pertinent general and specific data obtained during the property
Page 20
inspection of the subject. A legal description was provided by the client or obtained in the local court
records. Property tax data were obtained in the assessor's compiled records obtained on the internet. A
five year history of ownership was researched in the history section of the assessment property tax cards.
The appraiser regularly practices in this market and maintains records of that practice typical in the area and
typical of my peers. The appraiser accesses the ----various MLS & sources---- and, in addition to---- Deeds and mortgages
Information that is provided through brokers in the subject area, and personal records of collected data supplement our records.
(checkboxes below did not 'copy')
Specifically, the appraiser inspected the property
9 interior & exterior : exterior only 9 did not inspect personally
The primary property improvements were measured by the appraiser using
: assessment records : measurement by appraiser (2013 report)
: statement of the owner 9 from prior report sketch
Square footages of small outbuildings were estimated by
: assessment records 9 measurement by appraiser
9 statement of the owner : from prior report sketch
I did interview the owner, Roxanna ******* and relied upon my prior appraisal and her statements for
information. I also obtained information of the sale of a----------------------omit-----------------------.
The appraiser is qualified by experience and / or education to perform the
assignment. The appraiser disclosed any lack of knowledge and any assistance provided by a third party and
what steps were taken to comply with the competency provisions, as necessary.
Unless otherwise stated, the following information was unavailable to the appraiser; 1.) The loan-to value
ratio, interest rate, term and discounts, if any, applicable to the subject mortgage; 2.) the copy of a
perimeter survey of the subject; 3.) copies of previous appraisal reports on the subject; 4.) copies of any
leases, lease addenda, or lease or sales options; 5.) a copy of any tenant register or rent roll of the subject
property, or; 6.) a copy of any soils report; environmental audit, survey, or site assessment; health department
report; mechanics lien; or preliminary abstract report that may have been performed.
The appraisal "inspection" is a value inspection and is no substitute for an engineering inspection.
Page 21
The highest and best use of the subject is projected based upon location, physical characteristics,
past and proposed uses, and applicable zoning. Each of the three accepted valuation methods have been
examined in this report. Any approach eliminated is explained under that section.
The Replacement Cost New (RCN), if used, was obtained from the current National Building Cost
Guide Manual. Life expectancy tables may be utilized public sources or books referenced above or calculated
by mathematical methods, ------omitted------. Owner interview is used to determine building specifications in
the absence of written ones. These items are held in work file as available.
Entrepreneurial incentive represent the amount an entrepreneur expects to receive as compensation for providing
coordination, expertise, and assuming the risks associated with development of a project. Part of the "soft
costs" of the cost method, this entrepreneurial profit is often minimal or non-existent on rural and owner
constructed properties. In turnkey bids that incentive is often shown as a direct payment to a person or
persons in charge of construction coordination. Owner contracted buildings such as barns or shop buildings
often represent little or no market reaction for entrepreneurial profit. Unless otherwise specified, soft costs
(construction interest, entrepreneurial profit, architectural fees, building permits, etc.) are included in the base
costs per Square foot. Such cost estimates are not a substitute for competent estimators with complete
working drawings. Estimating costs is not an exact science and there is room for legitimate disagreement of
what the "right" cost is. The appraisers estimate is not intended to be a substitute for professional judgment
or as a replacement for sound engineering cost estimating, but is merely an aid to developing an informed
opinion of value.
Accrued depreciation is estimated by the age-life or straight line method. This method takes the ratio
of effective age to total economic life with the resulting percentage multiplied by the replacement cost new to
arrive at the dollar estimate of accrued depreciation. Comparable land sales are examined to estimate the
market value of the land "as if vacant." Sales write ups are held in our files. Land value is added to the
depreciated cost new (DCN) of improvements to arrive at the indicated value of the subject by the cost
approach. Cost related adjustments in the sales comparison approach is based upon my analysis of costs for
comparable properties.
Comparable improved sales were examined and analyzed for use in estimating the market value of
the improved subject property. The unit of comparison is price per unit or dollars. The sales were compared
to subject improved tract and adjustments were made for differences. An adjustment grid or ranking table is
provided to assist the reader in understanding the reasoning behind adjustment applied. Items superior to
the subject were adjusted downwards and items inferior to the subject were adjusted upwards based upon the
comparative cost analysis methods, paired sales analysis, sensitivity analysis, and by extraction of values, as
described in The Appraisal of Real Estate
Page 22
As needed, market rents are extracted from market data. See approach for details.
Finally, the valuation indications are reconciled into a final estimate of defined value based upon the
accuracy, quantity, and appropriateness of the data gathered in my investigation.
