UP Standards

2.3.4.3. Property Data.

2.3.4.2. Neighborhood Factors.The appraiser shall describe the government project for which the property is being acquired and its impact, if any, on the neighborhood and the remainder property. The degree of detail regarding the government’s project included in this section should relate directly to the complexity of the government’s project and its impact on the remainder property.137 The aspects of the government’s project that will result in damages to the remainder property should be described in specific detail. 

2.3.4.1. Legal Description.The legal description of the remainder property shall be included. If a legal description of the remainder property is not available, appraisers may develop their own by utilizing the before acquisition legal description and excluding from it the legal description of the real estate acquired by the government.  If the estate acquired is less than a fee interest (e.g., an easement), the legal description under Section 2.3.2.1 may be referenced and the legal description of the property encumbered by the estate acquired should be included. If lengthy, the legal description should be briefly referenced and the full legal description should be included in the report’s addenda. 

2.3.4. Factual Data—After Acquisition (Partial Acquisitions Only).

2.3.3.6. Reconciliation and Final Opinion of Market Value.The appraiser must explain the reasoning applied to arrive at the final opinion of value and how the results of each approach to value were weighed in that opinion, and the reliability of each approach to value for solving the particular appraisal problem. See Section 1.6.  The appraiser shall also state the final opinion of value of all of the property under appraisal as a single amount, including the contributory value of fixtures, timber, minerals, and water rights, if any. The appraiser must avoid making a summation appraisal.136 The appraiser is solely responsible for the final opinion of value. If that value opinion includes elements of value that were based on estimates developed…

2.3.3.5. Income Capitalization Approach.The appraisal report shall include adequate factual data to support each figure and factor used and should be arranged in detailed form to show at least (1) estimated gross economic (or market) rent, or income; (2) allowance for vacancy and credit losses; (3) an itemized estimate of total expenses; and (4) an itemized estimate of the reserves for replacements, if applicable. Section 1.5.4 discusses the income capitalization approach in detail.  Capitalization of net income shall be at the rate prevailing for this type of property and location. The capitalization technique, method, and rate used should be explained in narrative form and supported by a statement of the sources of rates and factors. The preferred source of an…

2.3.3.4. Sales Comparison Approach.Each appraisal report must contain a sufficient description of the comparable sales131 used so that it is possible for the reader to understand the conclusions drawn by the appraiser from the comparable sales data. Photographs of the comparable sales are valuable visual aids that indicate the comparability of the property recently sold with the subject property. Such photographs must accompany each appraisal report not only to aid the review appraiser but also for the agency’s records and for later use in possible condemnation litigation. In addition to the identification of the property, every photograph should show the date taken and the name of the person taking the photograph.  Documentation of each comparable sale shall include the name…

2.3.3.3. Cost Approach.This portion of the report should be in the form of computational data, arranged in sequence, beginning with reproduction or replacement cost. The report should state the source (book and page—including last date of page revision—if a national service) of all figures used. Entrepreneur’s profit, as an element of reproduction or replacement cost, must be considered and discussed and if applicable, should be derived from market data whenever possible. If the appraiser retained the services of a contractor or professional cost estimator to assist in developing the reproduction or replacement cost estimate, this data should be referenced and the estimator’s report included in the addenda of the appraisal report.  The dollar amount of depreciation from all causes, including…

2.3.3.2.2. Subdivision Development Method.In those circumstances where the property has a highest and best use for subdivision purposes and the appraiser has developed the subdivision development method, the report must address all of the factors and assumptions used in sufficient detail for the client and intended users to understand the outcome of this method. The market support for each factor (lot sale price, absorption rate, development costs, expenses, time lag, and discount rate) used in this analysis must be clearly presented in the report. The discounted cash flow analysis prepared as part of this analysis must be included in the report. 

2.3.3.2.1. Sales Comparison Approach.In reporting the results of the sales comparison approach for land valuation, the appraiser shall provide detailed descriptions of confirmed sales of lands that have the same or similar highest and best use as the subject property. The description of each sale transaction used as a comparable sale should at a minimum include the date of the transaction, the price paid, the name of the seller, the name of the buyer, the size of the property, the location of the property, the zoning or other legal constraints on the property, and a description of the physical characteristics of the property. The person with whom the transaction was verified should also be identified.  Differences between the comparable sales…