2025-009 Ordinance - Laserfiche WebLink

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Sales Comparison Approach The Sales Comparison Approach is defined as, "The process of deriving a value indication for the subject property by comparing sales of similar properties to the property being appraised, identifying appropriate units of comparison, and making adjustments to the sale prices (or unit prices, as appropriate) of the comparable properties based on relevant, market -derived elements of comparison. The sales comparison approach may be used to value improved properties, vacant land, or land being considered as though vacant when an adequate supply of comparable sales is available 23 The principle of substitution is the basis of the Sales Comparison Approach as it is based on the proposition that when several similar or commensurate commodities, goods, or services are available, the one with the lowest price will attract the greatest demand and widest distribution 2b' The principle of substitution holds that the value of property tends to be set by the cost of acquiring a substitute or alternative property of similar utility and desirability within a reasonable amount of time25 The Sales Comparison Approach is generally applied in the following steps: I. Research the market to obtain information about transactions, listings and other offerings of properties similar to the subject property. 2. Verify the accuracy of the information by considering the transactions reflect arm's length market considerations. An appraiser verifies information by consulting knowledgeable source, usually one of the participants in the transaction. 3. Select the relevant units of comparison in the market (e.g., acre, square foot, multiplier, and develop a comparative analysis for each unit. 4. Compare the subject and comparable sales according to the elements of comparison and adjust the sale price of each comparable as appropriate. 5. Reconcile the multiple value indications that result from the comparable into a single value indication or valuation range. These sales have been adjusted in the areas of property rights, financing, conditions of sale, market conditions, and physical characteristics. The first four of these adjustments are taken in sequence before the application of physical areas of adjustment, they are discussed as follows: Real Prooerty rights: Adjustments in this category reflect differences in the interest conveyed and include adjustment for any leasehold interests. All of the sales considered were transfers of fee simple interests and have not been adjusted. Financing 'Perms: Adjustments in this category reflect any below or above market financing of the comparable properties, and the effect of such financing on property value. All of the sales considered were sold for cash or with conventional financing, and no adjustments were required for financing. Conditions of Sale: Adjustments in this category reflect any unusual differences in purchase motivation. Examples of conditions, which may require adjustment, are distress sales, foreclosures, forced sales, or sales to adjacent owners. All of the properties considered were sold in arm's length transactions. Sale Three was purchased by the adjacent owner and has been negatively adjusted to reflect the premium paid for an adjacent parcel. IAM.n(Chse APp.,.I lnaieile, 2022)pngc 170 Ldibon (Chicago ADprai W Imli Wlc, 2022) pegs 194. 30 11, BRAMAN & CO., INC.- Rul F.etem Appraissk & Conwhmg www. cphco.com