Vacant Lot Appraisal ReportAPPRAISAL REPORT
VACANT LOT
AIRPORT RD.
KALISPELL, MONTANA
BY
JAMES 0. KELLEY
REAL ESTATE APPRAISER
TABLE OF CONTENTS
INTRODUCTION:
Letter of Transmittal
Property Data
Contingent and Limiting Conditions
Appraisal Definition and Process
Identification of Property
Purpose of Appraisal & Definition of Market
DESCRIPTION, ANALYSIS & CONCLUSION:
Regional and City Data
Neighborhood Data
Site Data
Zoning
Highest and Best Use
Sales Comparison
Final Correlation of Value
Certificate of Appraisal
Appraiser's Experience and Qualifications
Comparable Sales Sheets
Permitted Zoning Uses for RA1 Zone
Warranty Deed
Value
Front
1
2
3
6
8
9
13
13
18
18
21
24
25
A - 1
A-3
A-8
A-9
OWNER OF RECORD
PROPERTY APPRAISED
LEGAL DESCRIPTION
PROPERTY RIGHTS APPRAISED
IMPROVEMENTS
ZONING
HIGHEST AND BEST USE
SITE DATA
DATE OF VALUATION
PURPOSE OF APPRAISAL
VALUE CONCLUSION
PROPERTY DATA
:City of Kalispell
:One Vacant Lot
:Tract 1G in Section 19, T28N,
R21W, Flathead County
:UNENCUMBERED FEE SIMPLE ESTATE
:None
:R-1 (County Residential Zone)
:High Density Residential
:2.25 Acres
January 11, 1988
:ESTABLISH MARKET VALUE
:$50,000.00
CONTINGENT AND LIMITING CONDITIONS
1. The appraiser assumes no responsibility for matters of a
legal nature affecting the property appraised or the title there-
to, nor does the appraiser render any opinion as to the
title, which is -assumed to be good and marketable: The property
is appraised as though under responsible ownership.
2. Any sketch in the report may show approximate dimensions and
is included to assist the reader in visualizing the property.
The appraiser has made no survey of the property.
3. The appraiser is not required to give testimony or appear in
court because of having made the appraisal with reference to the
property in question, unless arrangements have been previously
made therefore.
4. Any distribution of the valuation in the report between land
and improvements applies only under the existing program of
utilization. The separate valuation for land and building must
not be used in conjunction with any other appraisal and are
invalid if so used.
5. The appraiser assumes that there are no hidden or unapparent
conditions of the property, subsoil, or structures, which would
render it more or less valuable. The appraiser assumes no
responsibility for such conditions, or for engineering which
might be required to discover such factors.
6. Information, estimates, and opinions furnished to the
appraiser, and contained in the report, are obtained from sources
considered reliable and believed to be true and correct.
.However, no responsibility _for the accuracy of such items
furnished the appraiser can be assumed by the appraiser.
7. Disclosure of the contents of the appraisal report is
governed by the Bylaws and Regulations of the professional
appraisal organizations with which the appraiser is affiliated.
8. Neither all, nor any part of the content of the report, or
copy thereof (including conclusions as to the property value, the
identity of the Appraiser, professional designations, reference
to any professional appraisal organizations, or the firm with
which the Appraiser is connected), shall be used for any purposes
by anyone but the client specified in the report, the borrower if
appraisal fee paid by same, the mortgagee or its successors and
assigns, mortgage insurers, consultants, professional appraisal
organizations, any state or federally approved financial
institutions, any department, agency, or instrumentality of the
United States or any state or the District of Columbia, without
the previous written consent of the appraiser; nor shall it be
conveyed by anyone to the public through advertising, public
relations, news, sales, or other media, without the written
consent and approval of the appraiser.
9. On all appraisals, subject to satisfactory completion,
repairs, or alterations, the appraisal report and value
conclusion are contingent upon completion of the improvements in
a workmanlike manner.
10. The final value reflected in this report assumes the subject
can be annexed into the City of Kalispell under an RA1 zoning
regulation. This annexation is considered to be both reasonable
and probable.
APPRAISAL DEFINITION AND PROCESS
An appraisal is an unbiased estimate of the nature, quality,
value or utility of an interest, or aspect of, identified real
estate. The appraisal is based on selective research into
appropriate market areas; assemblage of pertinent data; the
application of appropriate analytical techniques; and the
knowledge, experience and professional judgment necessary to
develop an appropriate value.
The appraisal considers all socio-economic conditions as they
affect the subject property. This encompasses the regional, city
and neighborhood conditions which include, but.are not limited to
the social, economic, governmental and environmental influences
and trends as they affect the marketability and value in the
market place of the subject property.
A physical inspection is made of the property as well as the
surrounding area for the purpose of analyzing all conditions
pertinent to the market value of the subject property.
Three recognized approaches to value are employed in the
appraisal process. The cost approach, sales comparison approach
and i.ncome capitalization approach as well as an explanation of
each as to how they are used will be included.
All three inter -related approaches are used in arriving at a
final value. They are approached from a different direction,
dealing with a separate set of circumstances and are evaluated as
such, and correlated based on which set of circumstances best
represents the market as it exists as of the date of the
appraisal.
The cost approach is based on the premise that value of a
property can be indicated by the current cost to construct a
reproduction or replacement for the improvements minus that
amount of depreciation evident in the structures from all causes
plus the value of the land and entrepreneurial profit. This
approach is particularly useful for appraising new or nearly new
improvements and for providing an alternative to the sales
comparison and income capitalization approaches. In addition,
cost approach techniques are employed to derive information
needed to apply both the sales comparison and income
capitalization approaches to value.
The sales comparison approach is most viable when an adequate
number of properties of similar type have been sold recently or
are currently for sale in the subject property market area. -- The
application of this approach produces a value indication for a
property through comparison with similar properties, called
comparable sales. The sales prices of properties judged to be
most comparable tend to set a range in which the value indication
for the subject property falls.
In using the income capitalization approach, the appraiser
measures the present value of the future benefits of property
ownership. Income streams_ and values of property resale
("reversion) are capitalized (converted) into a present lump -sum
value. This approach is generally most applicable in appraising
income producing investment properties.
The final analytical step in the appraisal process is the
reconciliation of the indications of value into a single dollar
figure or range in which the value will most likely fall. The
nature of the reconciliation depends on the number of approaches
which have been used (all three approaches are not always
applicable in every appraisal problem) and on the reliability of
the value indications derived from these approaches.
The most recent recording on the subject is a warranty deed from
Kalispell Elks Building Association to City of Kalispell,
Montana, a Municipal Corporation.
PROPERTY RIGHTS APPRAISED
The appraisal is based on an unencumbered fee value and subject
to a proposed sewer line easement across the north 35 feet of the
subject.
5
IDENTIFICATION OF THE PROPERTY
Subject property is a 2.25 acre parcel vacant parcel, located on
Airport Road and adjoining the city limits of the City of
Kalispell. The site is unimproved, except for the cities
underground sewer line which crosses the north side of the
property.
The property is legally described as:
A tract of land situate, lying and being in the E1/2, NE1/4,
NE1/4, Section 19, T28N, R21W, M.P.M., Flathead County,
Montana and more particularly described as follows to wit:
Commencing at the Northeast Corner of said Section 19, thence
S 0 degrees 02' W., and along the center of a county Road, a
distance of 441.8 feet to a point; Thence N 89 degrees 58'
W., 30 feet to the Westerly Boundary line of said County Road
and the true point of beginning of the tract of land being
described; Thence continuing with the following bearings and
distances:
N 89 degrees 58' W., 280 feet,
S 0 degrees 02' W., 350 feet,
S 89 degrees 58' E., 280 feet,
N 0 degrees 02' E., 350 feet to the true point of
beginning and containing approximately 2.25 acres, more or
less.
This tract is also known as tract 1G, in section 19, T28N,
R21W, Flathead County.
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PURPOSE OF THE APPRAISAL & DEFINITION OF MARKET VALUE
This appraisal is undertaken to estimate market value.
Market value, as used in this report, is defined as follows:
"The most probable price in cash, terms equivalent to cash,
or in other precisely revealed terms, for which the
appraised property will sell in a competitive market under
all conditions requisite to fair sale, with the buyer and
seller each acting prudently, knowledgeably, and for self-
interest, and assuming that neither is under undue duress".
Implicit in this definition is the consummation of a sale as of a
specified date and the passing of title from seller to buyer
under conditions whereby:
1. Buyer and seller are motivated by self-interest.
2. Buyer and seller are well informed and are acting
prudently.
3. The property is exposed for a reasonable time on the
open market.
4. Payment is made in cash, its equivalent, or in
specified financing terms.
5. Specified financing, if any, may be the financing
actually in place or on terms generally available for
the property type in its locale on the effective
appraisal date.
6. The effect , if any, on the amount of market value of
atypical financing, services, or fees shall be clearly
and precisely revealed in the appraisal report.
DATE OF VALUATION
Value reported is as of the date of my physical inspection on
.January 11,.1988.,_ Property,subsequently has-been-r-eview on other
occasions.
rim
REGIONAL AND CITY DATA
The general trade area consists of Northwestern Montana with a
trade area population of 100,000+. Geographically, this takes in
all of Flathead, Lincoln, Lake Counties and parts of Missoula,
Sanders and Glacier Counties.
The economic base throughout this general trade area
broad, consisting
of:
1.
Logging and lumber production
2.
Mining
3.
Aluminum manufacturing
4.
Log home manufacturing
5.
Oil and gas exploration
6.
Concrete manufacturing
7.
Camper/canopy manufacturing
8.
Fiberglass products
9.
Semiconductor equipment manufacturing
10.
Metal fabrication/Metal buildings
11.
Farm/Agricultural production
12.
Government on all levels
13.
Recreation development
14.
Retirement
is quite
In this general trade area, Flathead County with the cities of
Kalispell, Whitefish, Columbia Falls and several smaller
communities make up the primary trade area, while the outlying
counties and fringe areas make up the secondary trade areas.
Kalispell, which is the county seat of Flathead county, is the
primary trade center of the greater Northwestern Montana trade
area. It is located at the junction of U.S. Highways #2 and #93.
This location is 35 miles west of Glacier National Park, 90 air
miles north of Missoula, 160 air miles east of Spokane,
Washington and 60 air miles south of the Canadian border.
CLIMATE
,Comparatively speaking, Flathead County has.,a..rel,atively moderate
climate compared with other -areas in Montana. The average annual
rain fall is 16 inches, average annual snow fall covers three
months in the winter, and the average annual growing season is
115 days.
Average Temperatures are as
Minimum
January 11.2
April 30.5
July 47.9
October 29.6
follows:
Mean
Maximum
19.3
27.4
42.6
54.6
65.0
82.1
42.5
55.3
POPULATION
The population of Flathead County is rapidly increasing in
comparison to the population of Montana, as evidenced by the
following figures supplied by the U.S. Census and the Kalispell
Chamber of Commerce:
YEAR CITY LIMITS GREATER KALISPELL FLATHEAD COUNTY % CHANGE
1960
10,151
No data
32,965
1970
10.526
No data
39,966
+21.2%
1980
10,648
22,860
51,966
+30.0%
1987
11,000
26,000
57,800
+11.2%
By comparison,-
these figures contrast
with -the following
state
figures
for the
same time period:
YEAR
STATE OF MONTANA
% CHANGE
1960
5 �1 , —027—
—
1970
674,767
+ 2.91°%
1980
786,690
+13.29%
1987
819,000
+ 4.40%
The above figures for Flathead County are primarily attributed to
the increased recognition of this area, on a nation-wide basis,
for the outdoor recreation amenities and a relatively low
population density. As the outdoor recreational amenities are
developed and publicized, this area population trend is likely to
continue.
ECONOMIC BASE
A somewhat diversified economic base in Flathead County has
resulted in more stable fluctuations than those in areas
dependent on one or two industries. The employment rate in the
area has steadil.y.increas.e.d following the-1-980 to 1983 national
recession. Then in the last year, the unemployment rate has gone
from a high of 10.9% in March, 1987, to a low of 5.8% in August
of 1987 with a last reported figure of 8.2% in November of 1987.
This November, 1987, figure compares to a 8.6% unemployment rate
for November of 1986. The current population estimate for
Flathead County is 57,800 with a labor force of 29,273. This
compares to a November 1986 population estimate of 56,800 and a
labor force of 29,755. This increase in population and decrease
in labor force as well as a decrease in unemployment rate is
reflective of less people out looking for work or have given up
on looking for work.
The unemployment rate is expected to continue to fluctuate on a
seasonal basis, due to the high number of seasonal employees
involved with the logging and outdoor recreation industries in
the area. A stabilized annual average is likely to remain in the
7% to 8% range.
0
10
The Columbia Falls Aluminum Company, operates an aluminum
reduction plant at the north end of the valley in Columbia Falls,
and is the largest single employer of the area. At the present
time this plant employs 700 to 800 people. This plant was
recently purchased by an investor group from ARCO with an
employee participation arrangement.
It should be noted that although the Columbia Falls Aluminum
plant is the single largest employer, the lumber/woods industry
is the largest employer on a regional basis.
The next largest employer is Plum Creek Lumber,.which has two saw
mill.s in the area. One is in the Evergreen area of Kalispell; the
other in Columbia Falls.
The recreation/tourism industry is showing the largest single
industry growth, primarily in the Whitefish area with the further
development and national advertising of the Big Mountain ski
area. Other recreation amenities drawing the tourist dollar to
this area are Glacier National Park, Flathead Lake, two million
acres of national forest land, 219 miles of wild and scenic
rivers, 1,700 miles of fishing streams, over 500 lakes and
approximately three million acres of dedicated wilderness area.
Both Kalispell and Whitefish have recently expanded their
shopping areas in an attempt to further establish the area as a
regional shopping center. In Kalispell, the existing Gateway
West Mall has doubled its size, and a second major mall and
convention center was opened in 1986 near the Kalispell downtown
area. In Whitefish, (15 miles north of Kalispell), another
shopping mall was completed in 1985. The new Kalispell Mall
is now 100% occupied, but has hurt the occupancy of the Gateway
West mall on the west side of Kalispell and the downtown
commercial space. 4
Other industries which help stabilize the area economy include a
semiconductor equipment manufacturer, log home manufacturers,
fiberglass products manufacturers, U.S. Forest Service head-
quarters, farm/agricultural production, camper/canopy manu-
facturer and various other small industries.
TRANSPORTATION
Glacier Park International Airport, centrally located between
Kalispell, Whitefish and Columbia Falls is currently served by
Western Airlines, Norwest Airlink and Horizon Airlines on a daily
basis.
Amtrak travels through Whitefish, and the Burlington Northern
Railroad has a freight spur line to Kalispell.
r..
Freightlines serving the area include BN Transport, Consolidated
Freightways, Garrett Freightlines, Glacier Carriers, Kootenai
Motor Freight, Salt Creek Freightways and Wallace -Colville Motor
Freight.
Auto leasing is -available through Avis, Budget; A-1 Rent--a-car,
Hertz and National plus several local agencies.
Bus service is available through Brown Bus lines and
Intermountain Transportation.
Both Kalispell and Whitefish have taxi services available and an
airport limousine service is available for air travelers.
COMMUNITY FACILITIES
Hospitals include Kalispell Regional Hospital and North Valley
Hospital. Together they have 154 beds. The area has a higher
than average number of medical personnel per capita.
The city of Kalispell provides water, sewer services, garbage
removal, library, police and fire protection.
Education facilities in Kalispell consist of eight elementary
schools, two junior high schools, one senior high school and one
community college.
Electrical service is provided by Pacific Power and Light and the
Flathead Electric Cooperative. Natural gas is provided by
Montana Power Company. Telephone is provided by Northwestern
Telephone.
Kalispell has five commercial banks, one savings bank, one
savings and loan branch and several mortgage companies and
finance companies.
TRENDS
Rapid growth is expected to continue in the recreation oriented
businesses. Also, with the construction and expansion of retail
shopping facilities, this area of the local economy is expected
to experience continued growth.
The woods products industry is likely to experience a slow stable
growth over the next few years, but is unlikely to ever reach the
level it was prior to the 1980 recession.
A degree of uncertainty exists in the local economy regarding the
aluminum reduction plant in Columbia Falls, as it was just
recently purchased by an investor group, and its future is
dependent on the price of aluminum and electricity. The
probability for its continued operation for the next three years
is good, because the plant has firm contracts for that period of
time.
Over-all, the outlook of the business community is currently
favorable. This is evidenced by the large number of commercial
projects which have been completed in the last two years.
Assuming there are no unforeseen economic down -turns in the
foreseeable future, the general area economy should experience a
continued stable growth.
NEIGHBORHOOD DATA
The subject neighborhood is on the south edge of Kalispell and
borders the City Airport to the east. To the west is undeveloped
farm land and the South Meadows subdivision which is a newly
developed residential subdivision. Along Airport Road is the
airport on the east which is comprised of some airport associated
commercial activities. The west side of Airport Road is
developed with single and multi -family residences on the north
end with some commercial activities on the far north end. The
southern end is approximately 50% vacant, with some single family
residences. In this area is the new city baseball fields and an
auction house. In the last few years this strip,h_as seen little
new construction-. -
As the majority of sites along Airport Road which are currently
outside the city, do adjoin the City of Kalispell. It is likely
that they could be annexed to the City. In that case, all city
services would be available.
SITE DATA
The site is a rectangular shaped parcel measuring 280' x 350'
containing approximately 2.25 acres with 350 feet of frontage on
Airport Road.
The city sewer line runs across the north 25 feet of the site.
With this sewer line, the City of Kalispell will require a 35
foot easement across the north 35 feet of the subject site for
access and repair of this line.
Topographically, the site is level to highway grade and should
provide adequate drainage.
The rear portion of the lot appears to be within the 100 year
flood zone, but the front portion of the site will provide
adequate size for the construction of a residence.
The site is currently out side the city limits, but adjoins the
city on the north and east sides. Being outside the city, no
public services are now available. However, it is likely and
probable that it will be annexed into the city in the near
future. Once that is done, all city services will be available.
The site will then be serviced by city police and fire
protection. Electricity is provided by Pacific Power and Light,
telephone is supplied by Northwestern Telephone Company and
natural gas is supplied by Montana Power. Water and sewer will
then be provided by the city of Kalispell.
f . , �� 2903
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i AREA NOT INCLUDED
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30
Once annexed into the City, the subject will administratively be
out of the flood plain.
ZONING
Zoning is currently covered by the county zone of R-1. This is a
residential district which provides estate type development.
These areas would be normally located in rural areas away from
concentrated urban development, or in areas where it is desirable
to permit only low density development, e.g., extreme topography,
areas adjacent to flood plains, airport runway alignment
extension, etc.
This zone provides for a minimum lot size of one acre.
The subject does adjoin the City of Kalispell and is classified
in the Kalispell City -County Master plan as high density urban
residential. This combined with the fact that it adjoins a RA1
zone, makes it likely that it would be annexed into a RA1 zone.
The RA1 zone in the City is a residential apartment district to
provide areas for multi -family use and compatible non-residential
uses of high land use intensity. It should be closely associated
with primary intensity generators. This district may be applied
within the planning area, but requires thoroughfares access and
all public facilities. See addendum for list of permitted uses.
HIGHEST AND BEST USE
Highest and best use is defined as, "The reasonable and probable
use that supports the highest present value, as defined, as of
the date of the appraisal". --
Alternatively defined as, "The use, from among reasonably
probable and legal alternative uses, found to be physically
possible, appropriately supported, financially feasible, and that
results in the highest present land value".
The second definition applies specifically to the highest and
best use of land or sites as though vacant. When a site contains
improvements, the highest and best use may be determined to be
different from the existing use. The existing use will continue
unless and until land value in its highest and best use exceeds
the sum of the value of the entire property in its existing use
and the cost to remove the improvements.
Implied in these definitions is that the determination of highest
and best use takes into account the contribution of a specific
use to the community and community development goals as well as
the benefits of that use to individual property owners. An
additional implication is that the determination of highest and
best use results from the appraiser's judgment and analytical
skill - that is, that the use determined from analysis represents
an opinion, not a fact to be found. In appraisal practice, the
concept of highest and best use represents the premise upon which
value is based. In the context of most probable selling price
(market value), another appropriate and alternative term to
reflect highest and best use, would be most profitable use.
The definitions of highest and best use indicate that there are
two types of highest and best use . The first is highest and
best use of land or a site as though vacant. The second is
highest and best use of a property as improved. Each type
requires a separate analysis. Moreover, in each case, the
existing use may or may not be different from the site's highest
and best use.
In the highest and best use analysis of both the land as vacant
and the property as improved, a use must meet four criteria.
The criteria are that the highest and best use must be (1)
physically possible, (2) legally permissible, (3) financially
feasible, and (4) maximally productive.
Currently, the subject is located in the county and adjoins the
City of Kalispell. It is considered both reasonable and highly
probable that it will be annexed into the City. Because of this
probable annexation, the highest and best use analysis reflects
this probable change.
First an analysis of the site as though vacant.
Physically, the site
measures; 280 feet by
access easement to
Kalispell. The rear
100 year flood plain,
longer be considered
restriction would not
is restricted only by
350 feet. The north 35
service the city sewer
portion of the subject is
but once annexed to the
to be in the flood plain.
be a factor once annexed.
its size, which
feet will have an
by the City of
currently in the
City, it would no
Therefore, this
Legally, the site is currently zoned R-1 in the county. However,
due to the fact that this parcel could be annexed into the City
of Kalispell under a RA1 zone, this legal restriction is
considered to be most applicable. The city RA1 zone will allow a
higher and thus, more valuable use to the subject than does the
current, R-1 county zone. Under the City RA1 zone, high density
residential development is allowed with a maximum permitted
density of 33 units per acre.
Financially, at this time there is very little high density
residential development underway in the Kalispell area. Various
tracts with a similar use potential are currently on the market
for sale and have not sold. This combined with the fact that
numerous existing high density residential projects in the
Kalispell area are currently being foreclosed upon, indicates the
current lack of demand for this type of property.
Generally speaking, it can be concluded that the site's location
along Airport Road has high density residential potential,
[a
1Q
Im
20
SALES COMPARISON APPROACH
This approach is defined as "An appraisal procedure in which the
market value estimate is predicated upon prices paid in actual
market transactions and current listings, the former fixing the
lower limit of value in a static or advancing market (price wise)
and fixing the higher limit of value in a declining market; and
the latter fixing the higher limit in any market. It is a process
of analyzing sales of similar recently sold properties in order
to derive an indication of the most probable sales price of the
property being appraised. The reliability of this technique is
dependent upon (a) the availability of comparable sales data, (b)
the verification of the sales data, (c) the degree of
comparability or extent of adjustments necessary for time
differences, and (d) the absence of non -typical conditions
affecting the sales price".
In essence, all approaches to value (particularly when the
)urpose of the appraisal is to establish market value) are market
elated approaches since the data inputs are presumably market
ierived.
:t is a distinct requirement of this approach that sales of
)imilar type properties be available for comparison with the
subject. In a review of the Kalispell area, it is found that
.hree sales and three listings are available for analysis. They
,re listed in the addenda.
ALES RECAP
Address
Lot Size
Date
Price
Price / SF
1608 1st Ave. W.
1.01 acres
12/84
$25,000.00
$.51
Current listed price
of sale #1
$43,500.00
$.99
2130 Airport Rd.
.682 acre
7/87
$62,000.00
$.34
Hawthorn St.
4.7 acres
3/87
$160,000.00
$.64
i s t i n g s
West end Liberty St.
'3.0 acres-
1/88
$75,000.00
$.57
803 West Wyoming
3.0 acres
1/88
$85,000.00
$.56
ANALYSIS AND COMMENTS ON MARKET DATA
)MMENTS ON MARKET DATA:
ile one is located in the same area as the subject and was
irchased for a multi -family use, but was not built on. This is
i older sale, but general market data on residential oriented
operties in the Kalispell area indicates that property values
ve not significantly changed in the last four years. This
,operty has been on the market at various times over the last
I@
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four years at prices ranging from $40,000.00 to $43,500.00 and
has not sold. It is currently listed for $43,500.00. This sale
indicates a price at which a similar property in the same area
with a similar use potential has sold for in the past. The
listing of this property indicates an upper limit, or value
ceiling, as the property has not resold at the increased price.
Sale two is the recent sale of a single family residential
property to the south of the subject. Although this is a current
sale and is in the same area as the subject. It has no multi-
family potential and was sold, solely for single family purposes.
The lot value is an indicator of value for single family purposes
which the current R-1 county zoning will allow for the subject.
This sale is an important consideration in the highest and best
use analysis, in that it shows, the highest value will not be
obtained if the subject is left in the county under the current
zoning restrictions.
Sale three is a recent sale of a 4.7 acre site in a location
which is superior for multi -family purposes. It is superior in
that it is in a solely residential area and the properties in the
area are better in appearance. Although the legal use potential
of this site is the same as the subjects, this property is more
adaptable to PUD development because that use is consistent with
its general neighborhood. The subject is on a high traffic
street and the neighborhood does not have the type of property
compatibility which this comparable does for PUD or multi -family
uses.
Listing number one is on the edge of the same neighborhood as
sale three. It is located in the county and on the cities edge,
similar to the subject. The general appearance and use
compatibility of the immediate properties around this listing is
very similar to the subjects and inferior to those of sale three.
Given the similarity of locations and use potentials, this
listing can best be used to indicate a upper limit to value.
Listing two is in a county location which is surrounded by the
City. It is very similar to listing number one, but is
considered a less reliable indicator, because of the potential
error in extracting the value of the residence which is
associated with this listing.
SALE COMPARISON RECONCILIATION:
Sales and listings indicate a value range of $.34 to $.99 per
square foot. The most similar properties are sales 1, 3 and
listing 1. These comparables indicate a range of $.51 to $.64
per square foot. Listing one, which has not sold, is more
lar to the subject than is sale three. This tends to narrow
the range to '$.51 to $.57 per square foot. Grven that listing
one has not sold at that price and may very well sell for less,
it is best used as a indicator of the upper limit to value. Sale
one is an older sale, but given its location and the fact that
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general property values have not significantly changed in recent
years, this process of elimination tends to indicate that its
value of $.51 per square foot is the most appropriate indicator
of value for the subject.
Based on this analysis and subject to the statement of contingent
and limiting conditions as stated on page two of this report,
the final value by the sales comparison approach as of January
11, 1988 is ($.51 * 98,000 sf = $49,980.00); rounded to:
FIFTY THOUSAND DOLLARS
$50,000.00
PA
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FINAL RECONCILIATION
It is considered good practice among professional appraisers to
use the three basic approaches to value when possible in valuing
real estate. If each approach could be done exactly correct,
each would give (theoretically) exactly the same answer. Since
appraising is not an exact science, but rather, a matter of
estimating value based upon available data, those in the
appraisal business use the three approaches in order to best
bracket value by using each as a check, one against the other.
In the case of valuing a vacant parcel of land such as the
subject, the sales comparison approach is considered the only
reliable indicator. For this reason, the other two approaches
are not considered.
Based on the above stated reasons and subject to the statement of
contingent and limiting conditions stated on page two of ._this
report, the final value of the subject property as of January 11,
1988 is estimated to be:
FIFTY THOUSAND DOLLARS
$50,000.00
On
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