Where to put external obsolescence in the cost approach section?

[J Grant]

Perfect! The externally is built into the site value. I say, “site” because I took a course where the proctor said he beat up appraisers who said “land” value in the cost approach. He pointed to the form that said, “site”. This means land that is ready for improvement.

Again, your point is correct.

I agree, site is a better word !

 

[David S]

Perfect! The externally is built into the site value. I say, “site” because I took a course where the proctor said he beat up appraisers who said “land” value in the cost approach. He pointed to the form that said, “site”. This means land that is ready for improvement.

Again, your point is correct.

I called reviewer again. He said just directly reduce the site value. Then put the comment on it. So I put this:

Since the appraiser already applied about 10% discount for external obsolescence to the site / lot value, no need to apply external depreciation again for the building in the cost approach section.

Yes, the site and lot are similar concept, like cooked food and ready to eat. Both are much different from land or raw land, like raw food, about half value of the lot / site here.

 

[Terrel L. Shields]

here is no line in the URAR cost approach for ext ob

Yes there is. It applies to improvements only. Land is land and valued with its features (negative and positive) as is. The book says, "as if vacant and available for its HBU"...quote."
And yes, site includes land and site improvements.

He said just directly reduce the site value.

If that is what land is worth under similar conditions. It is what it is

 

[Lee Lansford ASA]

I try to put something the line above Garage / Carport. But it is only allow positive, not negative, so I can't use it for external obsolescence of the land / site.

The site value reflects positives and negatives associated with the land.

Depreciation applies only to the improvements that are upon the land.

 

[Zoe]

The site value reflects positives and negatives associated with the land.

Depreciation applies only to the improvements that are upon the land.

Good to hear from you again.

land don't depreciate.

 

[Zoe]

No depreciation can be counted on the land. NONE.

Improvements yes. And you can have other issues with improvements relative to H&B use especially which is required on market value appraisal.

 

[Tom D]

You cost perfectionist. It says the cost approach at the top. When you do the site/land value number, that is a seperate approach, which is on a separate land appraisal form, you then would make the external depreciation, etc on that form.

As said above, that land number has the external deprec done already. The cost approach is for the improvements done on that land.

But, how many actually do it right.

 

[David S]

I called reviewer again. He said just directly reduce the site value. Then put the comment on it. So I put this:

Since the appraiser already applied about 10% discount for external obsolescence to the site / lot value, no need to apply external depreciation again for the building in the cost approach section.

Yes, the site and lot are similar concept, like cooked food and ready to eat. Both are much different from land or raw land, like raw food, about half value of the lot / site here.

Let's flip the question again: What shall will put "External" box? For example...?