0 Land is basic to real estate appraisal. It is one of the essential components of property:  land  improvements to the land (site improvements)  buildings comprise the total property value When using a cost approach to value, a land schedule is needed to allocate the amount of value attributable to the land. When using the Cost Approach, the land value is added to the site improvements (water, septic, driveway, etc.) and the cost of improvements (buildings) minus depreciation to indicate an overall value for the property.

1 Land Schedules are an important component of a cost approach to value in a mass appraisal setting. Land + Site Improvements + RCNLD (Replacement Cost New Less (Minus) – Depreciation) ------= Estimate of Value by the Cost Approach

(RCN)

(RCNLD)

2 You need to understand where your values came from. **** ALL OF THESE COME FROM THE MARKET*** While we do not have the time or resources to do an individual sales comparison approach on every piece of land, we will use sales to develop a schedule to apply to all land in town. In addition, if you “inherited” an existing land schedule it is important that you understand how this land schedule was derived and how it relates to your current valuation system and the current market. The basis of a land schedule is the market (sales). A full land analysis should be performed to determine what factors affected the sale of each parcel of land and how that information can be used to value each piece of land within a town. We are trying to project what we know (the market / the sales information) onto what we do not know (land values for unsold properties). In order to do this you must become a student of your market! Property Value = Bull’s Eye!

Sales Information

3 • Identification- STEP 1- • Define the Problem

• Analysis- • General Market Factors • Specific of sales & then STEP 2 subject(s)

• Valuation • Project/apply the results of your analysis onto the subject STEP 3 property or properties

4 IDENTIFICATION STEP 1 DEFINE THE PROBLEM-

Identify what we are to value. What is the property we are valuing? One parcel or several parcels. In town assessment work, typically we are valuing all land, town wide. How is land described and measured? Land Description Systems- The earliest form of land description was the “bounded” description, which described the property by reference to physical features or adjacent property owners. Typical features included trees, ridgelines, streams and roads. Little thought was given to the fact that a fence line or tree line might someday cease to exist. As land became more valuable and disputes over unclear “bounds” became more numerous, better methods of description evolved. It became a common practice to measure the direction of property lines with compass bearings and the distance with measuring chains or tapes. Property described in this manner became known as “metes and bounds”.

5 IDENTIFICATION STEP 1 DEFINE THE PROBLEM-

Metes and Bounds- although this is an older term for a description of property lines- “metes” refers to measurement and “bounds” refers to boundaries including features of terrain and other markers. Most deeds that you will find today will have some sort of metes and bounds description, although not all are thorough or conclusive. The bearing of a line is the angle between a north-south meridian and the line from north or south toward the east or west. In a metes and bounds description, each property line is described, with the beginning of each line being the end of the preceding line. A proper metes and bounds description should “close”; that is, the last line should come back to the point of beginning.

6 IDENTIFICATION STEP 1 DEFINE THE PROBLEM-

80 x 100 = 8000 20 x 100 = 2000 / 2 = 1000 8000 + 1000 = 9000 / 43560 = .2066 Acreage

80

100

100 ** If you know the square feet in an acre you can calculate the square footage of any portion of an acre. Conversely, if you know the square footage of an area you can calculate the acreage or portion of an acre. Example - .85 acres x 43,560 / sf per acre = 37,026 sq ft Example - 37,026 sq ft/43,560 sf per acre = .85 Acre

7 IDENTIFICATION STEP 1 DEFINE THE PROBLEM-

MEASUREMENTS (Interesting if not applicable)

1 = 8 FURLONGS 1 FURLONG= 660 FEET, OR 10 CHAINS 1 = 66 FEET, OR 4 RODS 1 = 16 1/2 FEET, OR 25 LINKS 1 LINK= 7.92 INCHES

1 HECTARE= 2.471 ACRES 1 HECTARE= 10,000 SQUARE METERS 1 SQUARE METER= 10.764 SQUARE FEET 1 METER= 39.37 INCHES= 3.2808 FEET

1 LEAGUE= 3 (OR 25 LABORS) 1 LABOR= 177.14 ACRES 1 VARA= 33 1/3 INCHES (TEXAS) 1 ARPENT= +/-191.8 FEET (LOUISIANA) 1 POLE (AKA PERCH, ROD)= 16.5 FEET 1 SMOKE= THE DISTANCE A MAN TRAVELS ON MULE BACK WHILE SMOKING A CIGARETTE 1 COLPA= OLD IRISH MEASURE OF LAND EQUAL TO THAT WHICH CAN SUPPORT A HORSE OR COW FOR A YEAR- APPROXIMATELY, AN IRISH ACRE OF GOOD LAND 1 DAYS WORK= 4 SQUARE PERCHES 40 DAYS WORK= 1 ACRE OR THE AMOUNT A TEAM OF OXEN COULD WORK IN A DAY 1 ACRE= 10 SQUARE CHAINS 1 ACRE= 43,560 SQUARE FEET

8 IDENTIFICATION STEP 1 DEFINE THE PROBLEM-

Other types of land identification systems:  Rectangular Survey System- 6 mile by 6 mile townships, 36 numbered sections and geographically referenced points. This system is used in at least 30 states and was started by the government in 1785.  Lot & Block  Longitude/Latitude References  X/Y Coordinates  Parcel ID Systems- Tie and Coordinate Land descriptions with value, and tax, etc.

9 IDENTIFICATION STEP 1 DEFINE THE PROBLEM-

MAPPING REFERENCES ONLINE www.EPA.gov - EPA.gov/enviromapper (contaminated sites) www.topozone.com (topography) www.terraserver.com (aerial) www.mapquest.com (aerial) www.nwi.fws.gov (wetlands) www.fema.gov/hazard/map/flood (flood maps) vcgi.org (aerial) earth.google.com (aerial)

10 IDENTIFICATION STEP 1 DEFINE THE PROBLEM-

Town wide property maps with integrated GIS can be very valuable in this process. Now that we have identified and defined what we are appraising, we will begin our analysis.

11 ANALYSIS - STEP 2 GENERAL

 Acreage accuracy is typically accepted in the following order:

 a) Deed (If clear measurements and markers are described in deed).

 b) Survey done by registered surveyor and recorded in town clerk’s office  (where no obvious errors are found).

 c) Property map. Topographic and flood plain maps are helpful also.

12 ANALYSIS - STEP 2 GENERAL Analysis of the sale or sales and the subject property or properties. What are the factors and attributes that will affect the value or values of the property or properties that we are valuing? These will be both general and town specific!

Land Valuation Theory Land supports all life and stands at the center of human cultures and institutions. Wars have been waged over land, and the rights to the ownership of land are embedded in the laws of all free nations and defended by their courts.

Land uniqueness stems from its fixed supply and immobility. Land cannot be manufactured or reproduced. Also, land is a factor of production required directly or indirectly in the production of all other goods. Our most basic resource, land is the source of all other wealth.

13 ANALYSIS - STEP 2 GENERAL

Appraisal Principles relating to land:

Increasing and Decreasing 3. Returns Balance Change 2. Surplus Productivit 4. y Anticipation

1. HIGHEST Supply AND BEST Competition and Demand USE

Substitution Conformity

Constant Use

Progression and Regression Contribution

14 ANALYSIS - STEP 2 GENERAL

1. Appraisal Principles Relating to Land Schedule Derivation

A. Principle of Supply and Demand

Supply and demand has special significance in land valuation because the supply of land is essentially fixed. This means that the price of land in a particular area will be determined by demand factors such as population density and rate of growth, local employment and income levels, the capability of local transportation systems and mortgage interest rates. The supply of land for a particular use may increase or decrease. For example, forest and farmland on the periphery of a city may be developed for residential use. The increased supply slows price increases.

15 ANALYSIS - STEP 2 GENERAL

A. Principle of Supply and Demand

The principle of supply and demand explains the large differences in land values between urban and rural areas, between different urban areas and even between different neighborhoods in the same urban or rural area. No other commodity exhibits such large variations in price. (LOCATION! LOCATION, LOCATION!)

Supply Increase- Demand Steady or Low- Prices Stabilize or Decrease

Supply Prices

Demand Supply Low- Demand High- Prices Increase Demand Prices Supply

16 ANALYSIS - STEP 2 GENERAL B. Principle of Surplus Productivity Principle of Surplus Productivity states that returns attributable to land are what remain after returns to labor, management and capital are satisfied. The principle of surplus productivity underscores the unique position of land in production and helps explain why land values can vary dramatically. If two parcels are used for identical purposes and are similar in their labor, management and capital requirements, but one because of its location, produces greater gross income than the other, then the difference in net income will be capitalized entirely into differences in land values. Example: Cost to develop and market lots in a subdivision. C. Principle of Change The principle of change states that market value is determined by dynamic economic, political and demographic factors such as zoning, rent controls, interest rates, transportation and local economic conditions. Due to the fact that the supply of land is relatively fixed, its value is affected by changes in economic, political and demographic market forces. Example - Interest rates, business/work, 911

17 ANALYSIS - STEP 2 GENERAL D. Principle of Anticipation The principle of anticipation, which underlies the income approach to value, states that market value equals the present value of future benefits. What does the person expect to get when buying the property? In the case of vacant commercial land, this principle means that land values will reflect the capitalized value of anticipated net income from commercial development of land. Similarly, the value of vacant residential land will reflect the capitalized value of rents (either actual or imputed) attributable to the land. The principles of anticipation and change underscore the need to estimate market value as of a given date.

Highest & Best Use

HIGHEST & BEST USE IS THE KEY DETERMINATION IN VALUING VACANT LAND!  Highest & Best Use is the reasonable, probable and legal use of vacant land or improved property that is physically possible, legally permissible, appropriately supported, financially feasible, and that results in the highest value.

18 ANALYSIS - STEP 2 GENERAL Highest & Best Use

Physically Possible – access, topography, size, etc. Legally permissible – zoning, deed restrictions, approvals Financially Feasible – demand of use Maximally productive – best return, scarcity of land.

Highest and best use means that the market value of property depends on potential use rather than on current use alone. Highest and best use is most obvious in the case of vacant land, which commands value based on potential use. The more profitable the potential use, the higher the demand and market value. Vacant land in an urban area commands greater value than vacant land in a rural area.  What use would bring the most profit or the highest value?  Consider limitations on the land- zoning, restrictions, etc.

19 ANALYSIS - STEP 2 GENERAL 2. Land ValueHighest is Created& Best Use Through Desire – desire to possess/own the good. Utility – capacity of goods to excite desire to possess (not usefulness of goods)  Purchasing Power – desire must be supported by financial ability to purchase. (economic affects) Scarcity – if there is a heavy supply (not scarcity) demand, price & value will be lower. 3. Factors Affecting Land Value A. Social Factors Social factors help explain patterns of land use as well as demand and price. People have basic desires for territory and companionship. These desires are manifested in clustering of people near urban centers and in various uses of land. Prestige also plays a major role in land use, as individuals and groups seek particular locations for social and economic reasons. Examples: New Subdivisions- we are social creatures. Neighborhood Influences. This will be considered in the neighborhood analysis.

20 ANALYSIS - STEP 2 GENERAL

B. Legal, governmental, and political policies Legal, governmental, and political policies can increase or decrease the demand for land. At the national level, monetary policy can either spur or slow economic growth and demand for land. State and local governments often provide specific incentives or disincentives for land development through such mechanisms as taxation, zoning, and land use controls and rents controls. The quality of local government services, such as roads, schools, police and fire protection, also affects demand. Examples: Zoning, 9/11, Recessions, Tax Stabilization, School Choice, etc. C. Physical, environmental and location Physical, environmental and location factors largely explain patterns of land values within a city or market area. In analyzing such factors, it is useful to distinguish the concepts of site and situation. Site attributes are size, topography, and other physical features of a given parcel. Situation attributes focus on the location of a parcel relative to other places, such as the central business district, interstate access, etc. Site attributes affect land values because owners are able to use the land’s inherent resources; situation attributes affect value because of nearness or accessibility to other resources.

21 ANALYSIS - STEP 2 SPECIFIC DATA

A successful land valuation study must include site and situation variables. * Site factors will be considered in the land grading process. * Situation factors will be considered in the neighborhood and general market analysis town to town. Market Analysis in Land Valuation Stratification is the sorting of sales and other market data into homogeneous groups. In most towns this will be one land schedule and one analysis, but more than one might be required if there is a commercial district, ski area or lake area that might have a different market. Within strata, land should be analyzed and valued according to common units of comparison. Sales prices are expressed as price per unit. The units chosen should conform to the basis upon which land is analyzed and sold in the market. For residential land, the parcel or lot, the square or acre, and, occasionally, the front foot provide appropriate units of comparison. Large tracts of vacant land are often compared on a cost per acre basis. Lake property is often compared on a front foot unit with variables for depth and/or other attributes.

22 ANALYSIS - STEP 2 SPECIFIC DATA

Market Analysis in Land Valuation

Steps to developing a land schedule: A. Collect base information of all land sales, which have occurred within a certain market period (include all sales in the original spreadsheet valid and not-valid). Then filter spreadsheet to valid sales only with notes on all eliminated sales. Depending on the size of the town, this may require a range of sales anywhere from three years to five years (however, if this is necessary, you will certainly want to consider whether or not a time adjustment is needed). Base information should include name of buyer and seller, location, parcel size, sale price, and sale date. Begin with only raw land sales at this point. If it is found that not enough information is available through raw land sales, you may need to abstract land values from newly constructed houses or add information from a similar market.

(THIS INFORMATION WILL BE RECORDED IN COLUMNS 1-8 OF THE SPREADSHEET)

23 ANALYSIS - STEP 2 SPECIFIC DATA

Columns from Spreadsheet

Steps to developing a land schedule: Instructions for Use of Land Sales Analysis Sheet List land sales in order of size of parcel, small parcels first (or list in any order and sort using excel). The various columns should at least show the following:

Spreadsheet #’s Column #1 – Grantor (Seller) Column #2 – Grantee (Buyer) Column # 3 – Describe location if possible, such as, E/S Higgins Road, T.H.4 – West of red dwelling. Column # 4 – Give parcel number or identification number Column # 4a – Give sale number – this number will follow the sale. Column # 5 – Sale date: Month and Year only Column # 6 – Sale price of land. Column # 7 – Size in acreage (don’t write A for acreage). Column # 8 – Price per acre. Round to nearest dollar (or five dollars), omit $ sign.

24 Market Analysis in Land Valuation Columns on Spreadsheet

1 2 3 4 4a 5 6/ 7= 8x Descriptive Sale Sale Sale Sale Price Grantor Grantee Location Map Loc # Date Price Size per acre

Sam Sample Jane Example South Street 01-100 1 2/18 13200 2 6600

Teri Gildersleeve David Example Main Street 03-109 5 3/18 39600 2 19800

Sara Sample Christie Wright Main Street 03-229 6 2/18 33000 2 16500

Doug Lay Wayne Doe Maple Lane 05-320 7 1/18 50000 2 25000 MaryAnn Whipple Gallivan Harry Bronson Lane 02-101 17 3/17 60000 5 12000 Whipple Nicholas Middle Ryan Data Lane 02-130 10 7/17 72000 5.8 12414 Darwin Whipple Washington Louis Smith Lane 02-244 11 6/17 60000 5.9 10169

Linda Lynds Ally Donalds South Street 01-120 12 5/17 62500 6 10417

George Ryan Thomas Pain South Street 01-230 13 9/17 72000 8 9000

Roger Harris Joseph Day West Street 04-090 9 11/17 130000 10 13000

Sandra Connor Danny Sample Angel Ave 04-111 8 10/17 87000 10.1 8614

Shelly Beach Tim Marlboro Atlantic Ave 03-299 2 8/17 43500 10.2 4265 Salmon Hill Frank Franklin Sally Sanborn Road 02-277 18 10/17 60000 25 2400

Joe Johnson Jack Jackson Jason Run 03-388 19 12/17 130000 33 3939 Dungeon Angel Towns Tina Valentine Drive 05-400 3 12/17 180000 50 3600

Amelia Jordan Anthony Billock North Ave 04-020 4 3/18 150000 50 3000

25 ANALYSIS - STEP 2 SPECIFIC DATA Market Analysis in Land Valuation

Steps to developing a land schedule: B. Arrange this information on a land sales analysis form from smallest lot size to largest lot size. Fill in any and all information that is available to you. (You should be able to complete columns #1-#8 from information available to you.) (Using Excel this can be done by sorting the information by column 7) C. Arrange all sales on a town map or sectional maps to indicate location. Use sale number or map number to indicate. (This will give you a nice visual of the Locational Influences in your town)

1 5 2 8 10

3 7 6 9 4

26 ANALYSIS - STEP 2 SPECIFIC DATA Market Analysis in Land Valuation

30000

25000 All Sales Unadjusted

20000

15000

10000

5000

0 0 10 20 30 40 50 60

27 ANALYSIS - STEP 2 SPECIFIC DATA Market Analysis in Land Valuation Steps to developing a land schedule: D. Develop a scattergram of sales information. Using graph paper- label the horizontal axis as size/acreage and the vertical axis as actual price per acre. If you are using excel, you will choose the sale price per acre and acre columns for the unadjusted scattergram. Plot each sale on your graph. In theory, most sales that are way out of range will have an explainable reason. (Do a Scattergram of the information BEFORE the grade was applied and AFTER to the show the change in the curve and see potential neighborhoods or oddities)

30000

25000

20000

15000

10000

5000

0 Sale Price per acre per Price Sale 0 20 40 60 Acreage

28 ANALYSIS - STEP 2 SPECIFIC DATA Market Analysis in Land Valuation Steps to developing a land schedule: E. Determine whether or not your land schedule will include water, septic and site improvement. You will need to know this before you assess the grade of a property. Consider the following: Do most land sales in this area sell with water and septic and a cleared site? Do most have public water and sewer? What is typical for my area? If all or most sales will include these improvements, your land schedule can include these. If all or most sales will not include these, then your land schedule should not include these. Either way, if you have some sales that do include public water and sewer, you will want to find two similar sales, one with water and sewer and one without to determine the market value of each. Be sure to note whether or not these values include water and sewer.

29 ANALYSIS - STEP 2 SPECIFIC DATA Market Analysis in Land Valuation

Steps to developing a land schedule: F. Attempt to get a good picture in your mind of an “average” piece of property in your town. (This step cannot be overstated – it is crucial!) What are its’ characteristics?: (the “average” parcel in your town)

 Location (to town and amenities, main road or off main road, neighborhood or rural)

 Utilities (available at the road, at site or would need work to get to parcel, water and sewer access or limitations)

 Road (paved, gravel, class 4, right of way)

 Access – to parcel from closest road (at grade or above or below, long drive needed)

 Topography (flat and level or above/below grade, open or wooded or a little of both)

Document your description of average for different acreage sizes. EVERY TOWN AND EVERY MARKET IS DIFFERENT.

30 ANALYSIS - STEP 2 SPECIFIC DATA Market Analysis in Land Valuation Steps to developing a land schedule: F. Attempt to get a good picture in your mind of an “average” piece of property in your town. What are its’ characteristics?:

 View (local, above average, below average)

 Drainage – if the parcel is not obviously wet assume average (Average, below average or poor)

 Waterway – (enhancing, no influence, detrimental, frontage and access)

 Environmental – (wetlands, deeryards, hazardous waste)

 Flood Zone – (yes or no)

 Size and shape – (conform to zoning, limitations due to shape, subdivision potential) The average pieces will vary from town to town, by acreage groupings and from different periods in the market to other periods. Document your description of average for different acreage sizes. EVERY TOWN AND EVERY MARKET IS DIFFERENT.

31 ANALYSIS - STEP 2 SPECIFIC DATA G. Research all sales as thoroughly as possible (Very important) This may include any or all of the following: mailing questionnaires on the sale to buyer and seller, research of any deeds, survey maps, or other maps relative to the property, site inspections and analysis of each property (this may need to be done more than once and should be done by more than one person). During the site inspection(s), gather as much information as possible, such as: access, topography, general appeal of the property, drainage, view, location, etc.

. . VERMONT DEPARTMENT OF TAXES Sales Verification Form Town Sale Property SELLER Sale Price Sale Date

R E Broker: Broker Phone #

Seller Phone # ( ) Property Type Doc No. You may want Questions Yes No 1. Was the sale between family members or close friends? to take pictures Relationship 2. Did the sale involve a trade, like kind exchange, debt payment etc.? Please explain if you will 3. Was the property rented, leased, or occupied by the buyer? have a sales 4 Is the property abutting a parcel already owned by buyer? (any contiguous property even if divided by road or river) 5. Was this a distress sale (divorce, estate, court decree, etc.) book with your Please explain 6. Were any back taxes, liens, etc. included in the sales price? Please explain land schedule 7. Were any substantial changes made to the property just before the sale? Please explain 8. Did you provide (take back) any mortgage financing? If so, amount. 1st. Mtg. $ 2nd Mtg $ 3rd Mtg $

9. Did you get an appraisal before putting the property on the market? If so, the appraised value (not town listed v$

10. Do you feel that the sale price reflects a fair market value? Please explain below if NO 11. Was any personal property included in the sale price? If so, what? What is the value? $

12. Was final sales price the result of negotiation the pCircle one YES NO

13. Additional Comments:

Date Verifying Persons______PVR-VF001a Signature 32 . . ANALYSIS - STEP 2 SPECIFIC DATA Market Analysis in Land Valuation Steps to developing a land schedule: G. Research all sales as thoroughly as possible. Note anything that strikes you as better than or worse than your “average” piece of property in town. Make as many notes and observations as you can. Make sure your information reflects the property as of the date of sale.

33 ANALYSIS - STEP 2 SPECIFIC DATA Market Analysis – Time Adjustments

Steps to developing a land schedule: H. Determine if a Time adjustment is Needed (spreadsheet Column 9) The illustration on the next page is an analysis of resales using paired sales analysis. This is one method of determining time adjustments. In order to do this analysis; you must find properties, which have sold more than once, with the only difference between the 1st and 2nd sale being time. The steps are to: 1. list the sales, 2. calculate the percent change between the first sale price and the resale price, 3. divide the percent change by the number of months, and 4. estimate a time adjustment from the results.

34 ANALYSIS - STEP 2 SPECIFIC DATA Market Analysis – Time Adjustments [Example: (67800-65000)/65000 =.043] Comp First Sale Second Sale Percent Months Percent Change between per month sales 1 65000 67800 .0430 10 .0043 2 73400 81800 24 3 58000 63500 .0948 21 .0045 4 59500 61100 7 5 62200 65500 .053 12 .0044 (Average = sum percent per month (.0217) divide by how many (5)) Average percent per month .0043 x 100 = .43% per month Comp #1 First Sale (10 months ago) 65,000 Current Sale (Present time) 67,800 Increase in value over ten months 2,800 (67,800 - 65,000) / 65000 = .043 x 100 = 4.3% change 67,800-65,000 = 2,800 / 65,000 = .043 / 10 mths = .0043 per month This method is valid if the Lister/Assessor is confident that no other changes to the property, physical or otherwise, have occurred to change the property value. Paired sales analysis represent the same property having sold twice or two sales of very similar properties. This requires the Lister/Assessor to locate properties that are very similar in all locational and physical characteristics.

35 Market Analysis in Land Valuation Columns on Spreadsheet Steps to developing a land schedule: Column #9. Show percentage per month increase at top of column, it may vary between large and small parcels or between areas of town. Column #10. Show either column 6 or 8 times column 9 value (rounded) 8x 9= 10 Sale Price per Sale Price time acre Time Adj adj 6600 1 6600 19800 1 19800 16500 1 16500 25000 1 25000 12000 1 12000 12414 1 12414 10169 1 10169 10417 1 10417 9000 1 9000 13000 1 13000 8614 1 8614 4265 1 4265 2400 1 2400 3939 1 3939 3600 1 3600

3000 1 3000 36 ANALYSIS - STEP 2 SPECIFIC DATA Market Analysis in Land Valuation Steps to developing a land schedule: Assign a grade for physical (as best you can) while looking at the property. (Spreadsheet Column 11a) You will need to assign a separate grade for physical attributes. Look to the physical attributes first- if everything there is average, most of the grade difference may be found in location. Location (neighborhood) will show itself later. This is only an estimate and will be used along with your notes and other information to adjust or modify later. Remember to think of the property in comparison to that “average” piece of property you have in your mind. Consider views, but be careful to consider whether the view is offset by the cost required to get to the views. Application of grades will add or subtract a percent from the sales price to bring the value back to or up to “average” or 1.0. You can extract grade from your market depending on your volume of sales. (THIS INFORMATION WILL BE RECORDED IN COLUMNS 11 – 13 ON THE SPREADSHEET)

37 ANALYSIS - STEP 2 SPECIFIC DATA Steps to developing a land schedule:

General Land Grades

Assigned Assigned Assigned Assigned Grade Grade Sub- Grade Grade Land #1 Grade Subject totals Land #2 Grade Subject UTILITIES Electric 0.00 0.00 0.00 0.00 None 0.00 0.00 0.00 0.00 0.00 0.00 ROAD Paved 0.00 0.00 0.00 0.00 Gravel 0.00 0.00 0.00 0.00 Class 4 0.00 0.00 0.00 0.00 Right of Way 0.00 0.00 0.00 0.00 Long ROW Unimp 0.00 0.00 0.00 0.00 0.00 0.00 ACCESS Good 0.00 0.00 0.00 0.00 Average 0.00 0.00 0.00 0.00 Poor 0.00 0.00 0.00 0.00 0.00 0.00 TOPOGRAPHY Level 0.00 0.00 0.00 0.00 Rolling 0.00 0.00 0.00 0.00 Steep Above/Below 0.00 0.00 0.00 0.00 0.00 0.00 VIEW Long Range 0.00 0.00 0.00 0.00 Above Average 0.00 0.00 0.00 0.00 Average 0.00 0.00 0.00 0.00 Below Average 0.00 0.00 0.00 0.00 Detrimental 0.00 0.00 0.00 0.00 0.00 0.00 DRAINAGE Well 0.00 0.00 0.00 0.00 Moderately Well 0.00 0.00 0.00 0.00 Moderate 0.00 0.00 0.00 0.00 Poor 0.00 0.00 0.00 0.00 Swamp 0.00 0.00 0.00 0.00 0.00 0.00 OTHER Above Average 0.00 0.00 0.00 0.00 Detrimental 0.00 0.00 0.00 0.00

Site Grade Land #1 Total Land Grade 0.00

If you use Other be sure you enter the formula and then delete it when you are finished with that parcel as it is to be used parcel specific

Rest of Land Grade Land #2 Total Land Grade 0.00

LET THE SALE GUIDE YOU-REMEMBER YOU ARE CONCERNED WITH DETERMINING WHAT THE MARKET WANTS AND NOT YOUR INDIVIDUAL PREFERENCES.

38 Market Analysis in Land Valuation Columns on Spreadsheet 10 11 x 11a = 12 13 = (10/12) Sale Price Adj time Sale Price time adj Appr Grade Comp Grade & grade Loc Phy

6600 1 0.4 0.4 16500

19800 1 1.2 1.2 16500

16500 1 1 1 16500

25000 1.5 1 1.5 16667

12000 1 1.1 1.1 10909

12414 1 1.2 1.2 10345

10169 1 1 1 10169

10417 1 1 1 10417

9000 1 1 1 9000

13000 1 1.5 1.5 8667

8614 1 1 1 8614

4265 1 0.5 0.5 8529

2400 1 .07 0.7 3429

3939 1 1.2 1.2 3283

3600 1.5 1 1.5 2400

3000 1 1.5 1.5 2000 One the first run the Location will be at a 1.

39 ANALYSIS - STEP 2 SPECIFIC DATA Market Analysis in Land Valuation

Steps to developing a land schedule: Average for your town | | | .9 1.0 Average 1.2

Ideally, all grade factors would be market extracted. This is accomplished by comparing two sales that are similar in all attributes except for one. Then the value percentage for that attribute can be calculated (market extracted).

Example of market extracted grade. Sale #1 - $40,000 – 2Ac 1/18 Sale #2 - $48,000 – 2Ac 2/18 All Attributes Similar with exception of view 48,000 / 40,000 = 1.2 grade for good view

40 General Land Grades Sale # 6 Assigned Grade Sub- Grade Subject totals Multipliers for Variable Values UTILITIES Utilities On Site 1.10 0.00 On Site At Road 1.00 1.00 At Road None 0.80 0.00 None 1.00 ROAD Road Paved 1.00 1.00 Paved Gravel 1.00 0.00 Gravel Class 4 0.90 0.00 Class 4 Right of Way 0.80 0.00 Right of Way 1.00 ACCESS Access Good 1.10 0.00 Good Average 1.00 1.00 Average Poor 0.50 0.00 Poor 1.00 TOPOGRAPHY Topography Level 1.00 1.00 Level Rolling 1.00 0.00 Rolling Steep Above/Below 0.80 0.00 Steep Abv/Below 1.00 VIEW View Long Range 1.50 0.00 Long Range Above Average 1.20 0.00 Above Average Average 1.00 1.00 Average Below Average 0.90 0.00 Below Average Detrimental 0.80 0.00 Detrimental 1.00 DRAINAGE Drainage Average 1.00 1.00 Average Below Average 0.80 0.00 Below Average Poor 0.50 0.00 Poor 1.00 WATERWAY Waterway Enhancing 2.00 0.00 Enhancing No Influence 1.00 1.00 No Influence Detrimental 0.60 0.00 Detrimental 1.00 OTHER Neighborhood #1 Above Average 0.00 0.00 0.00 Detrimental 0.00 0.00 0.00 0.00 Total Land Grade 1.00

Sale # 6 Sale Price $33,000 Sale Date 2/08 Land Size- 2 Acres

Average 2 Acre Land Used to Develop Multipliers

41 General Land Grades Sale # 1 Assigned Grade Sub- Grade Subject totals Multipliers for Variable Values UTILITIES Utilities On Site 1.10 0.00 On Site At Road 1.00 1.00 At Road None 0.80 0.00 None 1.00 ROAD Road Paved 1.00 0.00 Paved Gravel 1.00 1.00 Gravel Class 4 0.90 0.00 Class 4 Right of Way 0.80 0.00 Right of Way 1.00 ACCESS Access Good 1.10 0.00 Good Average 1.00 0.00 Average Poor 0.50 0.50 Poor 0.50 TOPOGRAPHY Topography Level 1.00 0.00 Level Rolling 1.00 0.00 Rolling Steep Above/Below 0.80 0.80 Steep Abv/Below 0.80 VIEW View Long Range 1.50 0.00 Long Range Above Average 1.20 0.00 Above Average Average 1.00 1.00 Average Below Average 0.90 0.00 Below Average Detrimental 0.80 0.00 Detrimental 1.00 DRAINAGE Drainage Average 1.00 1.00 Average Below Average 0.80 0.00 Below Average Poor 0.50 0.00 Poor 1.00 WATERWAY Waterway Enhancing 2.00 0.00 Enhancing No Influence 1.00 1.00 No Influence Detrimental 0.60 0.00 Detrimental 1.00 OTHER Neighborhood #1 Above Average 0.00 0.00 0.00 Detrimental 0.00 0.00 0.00 0.00 Total Land Grade 0.40

Sale #1 Sale Price $13,200 Sale Date 2/18 Land Size- 2 Acres

Access & Topography Multiplier Sale #1 13,200 Sale #6 33,000 13,200 / 33,000 = .40 No difference from Sale #6 (Avg 2Ac) other than Access & Topography

42 General Land Grades Sale # 5 Assigned Grade Sub- Grade Subject totals Multipliers for Variable Values UTILITIES Utilities On Site 1.10 0.00 On Site At Road 1.00 1.00 At Road None 0.80 0.00 None 1.00 ROAD Road Paved 1.00 1.00 Paved Gravel 1.00 0.00 Gravel Class 4 0.90 0.00 Class 4 Right of Way 0.80 0.00 Right of Way 1.00 ACCESS Access Good 1.10 0.00 Good Average 1.00 1.00 Average Poor 0.50 0.00 Poor 1.00 TOPOGRAPHY Topography Level 1.00 1.00 Level Rolling 1.00 0.00 Rolling Steep Above/Below 0.80 0.00 Steep Abv/Below 1.00 VIEW View Long Range 1.50 0.00 Long Range Above Average 1.20 1.20 Above Average Average 1.00 0.00 Average Below Average 0.90 0.00 Below Average Detrimental 0.80 0.00 Detrimental 1.20 DRAINAGE Drainage Average 1.00 1.00 Average Below Average 0.80 0.00 Below Average Poor 0.50 0.00 Poor 1.00 WATERWAY Waterway Enhancing 2.00 0.00 Enhancing No Influence 1.00 1.00 No Influence Detrimental 0.60 0.00 Detrimental 1.00 OTHER Neighborhood #1 Above Average 0.00 0.00 0.00 Detrimental 0.00 0.00 0.00 0.00 Total Land Grade 1.20

Sale #5 Sale Price $39,600 Sale Date 3/18 Land Size- 2 Acres

Above Average View Multiplier Sale #5 39,600 Sale #6 33,000 39,600 / 33,000 = 1.20 No difference from Sale #6 (Avg 2Ac) other than View

43 General Land Grades Sale # 7 Assigned Grade Sub- Grade Subject totals Multipliers for Variable Values UTILITIES Utilities On Site 1.10 0.00 On Site At Road 1.00 1.00 At Road None 0.80 0.00 None 1.00 ROAD Road Paved 1.00 1.00 Paved Gravel 1.00 0.00 Gravel Class 4 0.90 0.00 Class 4 Right of Way 0.80 0.00 Right of Way 1.00 ACCESS Access Good 1.10 0.00 Good Average 1.00 1.00 Average Poor 0.50 0.00 Poor 1.00 TOPOGRAPHY Topography Level 1.00 1.00 Level Rolling 1.00 0.00 Rolling Steep Above/Below 0.80 0.00 Steep Abv/Below 1.00 VIEW View Long Range 1.50 0.00 Long Range Above Average 1.20 0.00 Above Average Average 1.00 1.00 Average Below Average 0.90 0.00 Below Average Detrimental 0.80 0.00 Detrimental 1.00 DRAINAGE Drainage Average 1.00 1.00 Average Below Average 0.80 0.00 Below Average Poor 0.50 0.00 Poor 1.00 WATERWAY Waterway Enhancing 2.00 0.00 Enhancing No Influence 1.00 1.00 No Influence Detrimental 0.60 0.00 Detrimental 1.00 OTHER Neighborhood # 2 Above Average 0.00 0.00 0.00 Detrimental 0.00 0.00 0.00 0.00 Total Land Grade 1.00

Sale # 7 Sale Price $50,000 Sale Date 1/18 Land Size- 2 Acres

Neighborhood #2 Multiplier Sale #7 50,000 Sale #6 33,000 50,000 / 33,000 = 1.50 No difference from Sale #6 (Avg 2Ac) other than Location

44 General Land Grades Sale # 11 Assigned Grade Sub- Grade Subject totals Multipliers for Variable Values UTILITIES Utilities On Site 1.10 0.00 On Site At Road 1.00 1.00 At Road None 0.80 0.00 None 1.00 ROAD Road Paved 1.00 0.00 Paved Gravel 1.00 1.00 Gravel Class 4 0.90 0.00 Class 4 Right of Way 0.80 0.00 Right of Way 1.00 ACCESS Access Good 1.10 0.00 Good Average 1.00 1.00 Average Poor 0.50 0.00 Poor 1.00 TOPOGRAPHY Topography Level 1.00 1.00 Level Rolling 1.00 0.00 Rolling Steep Above/Below 0.80 0.00 Steep Abv/Below 1.00 VIEW View Long Range 1.50 0.00 Long Range Above Average 1.20 0.00 Above Average Average 1.00 1.00 Average Below Average 0.90 0.00 Below Average Detrimental 0.80 0.00 Detrimental 1.00 DRAINAGE Drainage Average 1.00 1.00 Average Below Average 0.80 0.00 Below Average Poor 0.50 0.00 Poor 1.00 WATERWAY Waterway Enhancing 2.00 0.00 Enhancing No Influence 1.00 1.00 No Influence Detrimental 0.60 0.00 Detrimental 1.00 OTHER Neighborhood # 1 Above Average 0.00 0.00 0.00 Detrimental 0.00 0.00 0.00 0.00 Total Land Grade 1.00

Sale # 11 Sale Price $60,000 Sale Date 6/17 Land Size- 5.8 Acres

Average 6 Acre Land Used to Develop Multipliers

45 General Land Grades Sale # 10 Assigned Grade Sub- Grade Subject totals Multipliers for Variable Values UTILITIES Utilities On Site 1.10 0.00 On Site At Road 1.00 1.00 At Road None 0.80 0.00 None 1.00 ROAD Road Paved 1.00 0.00 Paved Gravel 1.00 1.00 Gravel Class 4 0.90 0.00 Class 4 Right of Way 0.80 0.00 Right of Way 1.00 ACCESS Access Good 1.10 0.00 Good Average 1.00 1.00 Average Poor 0.50 0.00 Poor 1.00 TOPOGRAPHY Topography Level 1.00 1.00 Level Rolling 1.00 0.00 Rolling Steep Above/Below 0.80 0.00 Steep Abv/Below 1.00 VIEW View Long Range 1.50 0.00 Long Range Above Average 1.20 1.20 Above Average Average 1.00 0.00 Average Below Average 0.90 0.00 Below Average Detrimental 0.80 0.00 Detrimental 1.20 DRAINAGE Drainage Average 1.00 1.00 Average Below Average 0.80 0.00 Below Average Poor 0.50 0.00 Poor 1.00 WATERWAY Waterway Enhancing 2.00 0.00 Enhancing No Influence 1.00 1.00 No Influence Detrimental 0.60 0.00 Detrimental 1.00 OTHER Neighborhood # 1 Above Average 0.00 0.00 0.00 Detrimental 0.00 0.00 0.00 0.00 Total Land Grade 1.20

Sale # 10 Sale Price $72,000 Sale Date 7/17 Land Size- 5.8 Acres

Above Average View Multiplier Sale #10 72,000 Sale #11 60,000 72,000 / 60,000 = 1.20 No difference from Sale #11 (Avg 6Ac) other than View

46 General Land Grades Sale # 8 Assigned Grade Sub- Grade Subject totals Multipliers for Variable Values UTILITIES Utilities On Site 1.10 0.00 On Site At Road 1.00 1.00 At Road None 0.80 0.00 None 1.00 ROAD Road Paved 1.00 1.00 Paved Gravel 1.00 0.00 Gravel Class 4 0.90 0.00 Class 4 Right of Way 0.80 0.00 Right of Way 1.00 ACCESS Access Good 1.10 0.00 Good Average 1.00 1.00 Average Poor 0.50 0.00 Poor 1.00 TOPOGRAPHY Topography Level 1.00 0.00 Level Rolling 1.00 1.00 Rolling Steep Above/Below 0.80 0.00 Steep Abv/Below 1.00 VIEW View Long Range 1.50 0.00 Long Range Above Average 1.20 0.00 Above Average Average 1.00 1.00 Average Below Average 0.90 0.00 Below Average Detrimental 0.80 0.00 Detrimental 1.00 DRAINAGE Drainage Average 1.00 1.00 Average Below Average 0.80 0.00 Below Average Poor 0.50 0.00 Poor 1.00 WATERWAY Waterway Enhancing 2.00 0.00 Enhancing No Influence 1.00 1.00 No Influence Detrimental 0.60 0.00 Detrimental 1.00 OTHER Neighborhood # 1 Above Average 0.00 0.00 0.00 Detrimental 0.00 0.00 0.00 0.00 Total Land Grade 1.00

Sale # 8 Sale Price $87,000 Sale Date 10/17 Land Size- 10.1 Acres

Average 10 Acre Land Used to Develop Multipliers

47 General Land Grades Sale # 9 Assigned Grade Sub- Grade Subject totals Multipliers for Variable Values UTILITIES Utilities On Site 1.10 0.00 On Site At Road 1.00 1.00 At Road None 0.80 0.00 None 1.00 ROAD Road Paved 1.00 1.00 Paved Gravel 1.00 0.00 Gravel Class 4 0.90 0.00 Class 4 Right of Way 0.80 0.00 Right of Way 1.00 ACCESS Access Good 1.10 0.00 Good Average 1.00 1.00 Average Poor 0.50 0.00 Poor 1.00 TOPOGRAPHY Topography Level 1.00 0.00 Level Rolling 1.00 1.00 Rolling Steep Above/Below 0.80 0.00 Steep Abv/Below 1.00 VIEW View Long Range 1.50 1.50 Long Range Above Average 1.20 0.00 Above Average Average 1.00 0.00 Average Below Average 0.90 0.00 Below Average Detrimental 0.80 0.00 Detrimental 1.50 DRAINAGE Drainage Average 1.00 1.00 Average Below Average 0.80 0.00 Below Average Poor 0.50 0.00 Poor 1.00 WATERWAY Waterway Enhancing 2.00 0.00 Enhancing No Influence 1.00 1.00 No Influence Detrimental 0.60 0.00 Detrimental 1.00 OTHER Neighborhood # 1 Above Average 0.00 0.00 0.00 Detrimental 0.00 0.00 0.00 0.00 Total Land Grade 1.50

Sale # 9 Sale Price $130,000 Sale Date 11/17 Land Size- 10 Acres

Long Range View Multiplier Sale #9 130,000 Sale #8 87,000 130,000 / 87,000 = 1.50 No difference from Sale #8 (Avg 10Ac) other than View

48 General Land Grades Sale # 2 Assigned Grade Sub- Grade Subject totals Multipliers for Variable Values UTILITIES Utilities On Site 1.10 0.00 On Site At Road 1.00 1.00 At Road None 0.80 0.00 None 1.00 ROAD Road Paved 1.00 0.00 Paved Gravel 1.00 1.00 Gravel Class 4 0.90 0.00 Class 4 Right of Way 0.80 0.00 Right of Way 1.00 ACCESS Access Good 1.10 0.00 Good Average 1.00 0.00 Average Poor 0.50 0.50 Poor 0.50 TOPOGRAPHY Topography Level 1.00 1.00 Level Rolling 1.00 0.00 Rolling Steep Above/Below 0.80 0.00 Steep Abv/Below 1.00 VIEW View Long Range 1.50 0.00 Long Range Above Average 1.20 0.00 Above Average Average 1.00 1.00 Average Below Average 0.90 0.00 Below Average Detrimental 0.80 0.00 Detrimental 1.00 DRAINAGE Drainage Average 1.00 1.00 Average Below Average 0.80 0.00 Below Average Poor 0.50 0.00 Poor 1.00 WATERWAY Waterway Enhancing 2.00 0.00 Enhancing No Influence 1.00 1.00 No Influence Detrimental 0.60 0.00 Detrimental 1.00 OTHER Neighborhood # 1 Above Average 0.00 0.00 0.00 Detrimental 0.00 0.00 0.00 0.00 Total Land Grade 0.50

Sale # 2 Sale Price $43,500 Sale Date 8/17 Land Size- 10.2 Acres

Poor Access Multiplier Sale #2 43,500 Sale #8 87,000 43,500 / 87,000 = .50 No difference from Sale #8 (Avg 10Ac) other than Access

49 General Land Grades Sale # 3 Assigned Grade Sub- Grade Subject totals Multipliers for Variable Values UTILITIES Utilities On Site 1.10 0.00 On Site At Road 1.00 1.00 At Road None 0.80 0.00 None 1.00 ROAD Road Paved 1.00 0.00 Paved Gravel 1.00 1.00 Gravel Class 4 0.90 0.00 Class 4 Right of Way 0.80 0.00 Right of Way 1.00 ACCESS Access Good 1.10 0.00 Good Average 1.00 1.00 Average Poor 0.50 0.00 Poor 1.00 TOPOGRAPHY Topography Level 1.00 1.00 Level Rolling 1.00 0.00 Rolling Steep Above/Below 0.80 0.00 Steep Abv/Below 1.00 VIEW View Long Range 1.50 0.00 Long Range Above Average 1.20 0.00 Above Average Average 1.00 1.00 Average Below Average 0.90 0.00 Below Average Detrimental 0.80 0.00 Detrimental 1.00 DRAINAGE Drainage Average 1.00 1.00 Average Below Average 0.80 0.00 Below Average Poor 0.50 0.00 Poor 1.00 WATERWAY Waterway Enhancing 2.00 0.00 Enhancing No Influence 1.00 1.00 No Influence Detrimental 0.60 0.00 Detrimental 1.00 OTHER Neighborhood # 2 Above Average 0.00 0.00 0.00 Detrimental 0.00 0.00 0.00 0.00 Total Land Grade 1.00

Sale # 3 Sale Price $150,000 Sale Date 3/18 Land Size- 50 Acres

Neighborhood grade is projected from other paired sales.

50 General Land Grades Sale # 4 Assigned Grade Sub- Grade Subject totals Multipliers for Variable Values UTILITIES Utilities On Site 1.10 0.00 On Site At Road 1.00 1.00 At Road None 0.80 0.00 None 1.00 ROAD Road Paved 1.00 0.00 Paved Gravel 1.00 1.00 Gravel Class 4 0.90 0.00 Class 4 Right of Way 0.80 0.00 Right of Way 1.00 ACCESS Access Good 1.10 0.00 Good Average 1.00 1.00 Average Poor 0.50 0.00 Poor 1.00 TOPOGRAPHY Topography Level 1.00 1.00 Level Rolling 1.00 0.00 Rolling Steep Above/Below 0.80 0.00 Steep Abv/Below 1.00 VIEW View Long Range 1.50 0.00 Long Range Above Average 1.20 1.20 Above Average Average 1.00 0.00 Average Below Average 0.90 0.00 Below Average Detrimental 0.80 0.00 Detrimental 1.20 DRAINAGE Drainage Average 1.00 1.00 Average Below Average 0.80 0.00 Below Average Poor 0.50 0.00 Poor 1.00 WATERWAY Waterway Enhancing 2.00 0.00 Enhancing No Influence 1.00 1.00 No Influence Detrimental 0.60 0.00 Detrimental 1.00 OTHER Neighborhood # 1 Above Average 0.00 0.00 0.00 Detrimental 0.00 0.00 0.00 0.00 Total Land Grade 1.20

Sale # 4 Sale Price $144,000 Sale Date 3/18 Land Size- 50 Acres

Grade for view is projected from other paired sales.

51 ANALYSIS - STEP 2 SPECIFIC DATA Columns on Spreadsheet Steps to developing a land schedule: Column #11. and Column #11a. At time of inspection of land sales, preferably after analysis sheet has been completed through column #10, a judgment should be made as to the effect location (assume average 1.0 and let neighborhood show on scattergram and through value review). Also at this same time special note should be made of the physical characteristics of the land. Factors that should be considered include topography, type and depth of soil, shape of parcel, etc. It is recommended that you complete a data collection form for each parcel, sold and unsold. Column #11a. 1.0 represents average. Consider physical characteristics only. Column #12. Composite appraisal grade is column 11 x 11a.

**This is the time to analyze your scattergram and consider if the outliers represent neighborhoods. Do you have sales to prove neighborhood multipliers. If so, plug these into location factor.

52 ANALYSIS - STEP 2 SPECIFIC DATA Columns from Spreadsheet Steps to developing a land schedule: Column #13. Column 10 divided by column 12 brings all sale prices to common ground (representing average or 1.0 value) – in theory at least, either by value per acre or per parcel for average land in this size parcel. From column 13 should come the indicated values to record in the upper left-hand area of this sheet. It would be desirable to circle or underline in color the values in column 13 that are closest to the values you record at top left of the page. Record only those values that appear to be supported by column 13. (What you are attempting to find is 3 – 4 (at least) good (defensible) marker points – example – you are confident in your 2 acre, your 10 acre, your 50 acre and your 200 acre. The land schedule program that we have at Property Valuation & Review will logically fill in the points from there. Column #14. You’re best estimate of value per acre or per parcel, for average land for each parcel size represented. Column #15. Column 10 divided by column #14. The resulting factor will indicate whether the parcel of land sold above (over 1.0) or below (under 1.0) or at 1.0 value you have estimated for average land in this size parcel. This is a cross check of your average value compared to the grade you assigned. 53 Columns on Spreadsheet

10 11 x 11a = 12 13 14 15 Sale Price Sale Price Appr Grade Adj time & Est Value time adj Loc Phy Comp Grade grade Avg Land Sale Grade

6600 1 0.4 0.4 16500 16500 0.40

19800 1 1.2 1.2 16500 16500 1.20

16500 1 1 1 16500 16500 1.00

25000 1 1 1 25000 16500 1.52

12000 1 1.1 1.1 10909 11000 1.09

12414 1 1.2 1.2 10345 10000 1.24

10345 1 1 1 10345 10000 1.03

10417 1 1 1 10417 10000 1.04

9000 1 1 1 9000 9000 1.00

13000 1 1.5 1.5 8667 8700 1.49

8614 1 1 1 8614 8700 0.99

4265 1 0.5 0.5 8529 8700 0.49

2400 1 1 0.7 3429 3400 0.71

3939 1 1.2 1.2 3283 3200 1.23

3600 1 1 1 3600 2000 1.80

3000 1 1.5 1.5 2000 2000 1.50

54 ANALYSIS - STEP 2 SPECIFIC DATA Market Analysis in Land Valuation Steps to developing a land schedule: 10. Begin testing and verifying your data. Plug in your physical and location (assume 1.0 until you do your first scattergram) grade estimates to your land sales analysis form. Calculate the values through on the land sales analysis form (#9-#15) and compare them with average. Do they seem to be in line?

Compare your results with sales of similar sizes and similar neighborhoods. Do they seem to be in line?

Compare your result with the scattergram- are your average or close to average properties showing as such on the graph? Rethink and possibly re-inspect and do more research as necessary, adjust grades as appropriate.

55 ANALYSIS - STEP 2 SPECIFIC DATA Columns from Spreadsheet Steps to developing a land schedule: Column #16. Zoning district – letters and /or numbers designating the district with explanation of code at top of page. Column #17. Remarks column – Give brief description – don’t start in with this lot is, etc. Simply state. – Above grade – rolling or wet – below grade – 1 mile from electricity, etc. Sale # 16 17 Zoning Remarks Grade Adj. 1 steep rocky access 5 above average view 6 average 2 acre 14 Father to son 7 possible neighborhood 17 underground utility 10 above average view 11 average 6 acre 12 average 6 acre 15 abutting Property When the analysis sheet has been completely filled in it should be studied in an effort to see if adjustments that have been made are supported or refuted by this market analysis.

56 ANALYSIS - STEP 2 SPECIFIC DATA

30000

25000 Neighborhood #2 20000 Adjusted Sales (Physical Only)

15000

10000 Neighborhood #2

5000

0 0 10 20 30 40 50 60 30000

25000

20000 Neighborhood #2 Now 2 sales are Adjusted Sales 15000 together (Physical and Location)

10000 Neighborhood #2

5000 Now 2 sales are together 0 0 10 20 30 40 50 60

57 STEP 3 Valuation Project /and Apply the Results

A. Establish Marker Points Once you have completed the spreadsheet you should be able to identify ‘Marker Points’ or three to four value points that you are confident you can defend/support for per Ac value. Example- 2 Ac = adjusted value of $16,500/Ac = $33,000 6 Ac - adjusted value of $10,000/Ac = $60,000 10Ac - adjusted value of $8,700/Ac = $87,000 50 Ac - adjusted value of $2,500/Ac = $125,000 This is indicated by points on the curve & groupings of value on the spreadsheet. B. Develop Working Land Schedule Submit marker points to NEMRC for a “working” land schedule. This will be used for testing purposes and (may) not be hard coded into your computer system until you have finalized the values.

58 STEP 3 Valuation Project /and Apply the Results

C. Test Land Schedule Begin testing with newer sales and improved sales. As new land sales occur you will test this schedule. In addition, you will test sales of improved properties. This assumes that you have completed an analysis of the costs and developed appropriate cost multipliers, and site improvements values. D. Apply the Results Input land values to all properties (applying appropriate physical and location grades obtained through data collection and market analysis) and conduct review.

59 Land Values Full (Site inclusive) (Without site) Acres Value Acres Residual 1 26250 2 33000 3 39750 1 6750 4 46500 2 13500 5 53250 3 20250 6 60000 4 27000 7 66750 5 33750 8 73500 6 40500 9 80250 7 47250 10 87000 8 54000 11 87825 9 54825 12 88650 10 55650 “Market Driven” 13 89475 11 56475 Marker 14 90300 12 57300 points 15 91125 13 58125 16 91950 14 58950 17 92775 15 59775 18 93600 16 60600 19 94425 17 61425 20 95250 18 62250 21 96075 19 63075 22 96900 20 63900 23 97725 21 64725 24 98550 22 65550

25 99375 23 66375 60 Land Values Full (Site inclusive) (Without site) Acres Value Acres Residual 26 100200 24 67200 27 101025 25 68025 28 101850 26 68850 29 102675 27 69675 30 103500 28 70500 31 104325 29 71325 32 105150 30 72150 33 105975 31 72975 34 106800 32 73800 35 107625 33 74625 36 108450 34 75450 37 109275 35 76275 38 110100 36 77100 “Market 39 110925 37 77925 Driven” 40 111750 38 78750 Marker 41 112575 39 79575 points 42 113400 40 80400 43 114225 41 81225 44 115050 42 82050 45 115875 43 82875 46 116700 44 83700 47 117525 45 84525 48 118350 46 85350 49 119175 47 86175

50 120000 48 87000 61 62 Questions or Problems You May Encounter: 1. There are no sales to indicate the value of water and sewer within the town: Talk to local real estate appraisers for what they are using to adjust. Local contractors (well & septic) Look to abstract information from newly constructed homes. 2. How to tell if a time adjustment is needed? Look for two sales of the same or similar pieces of land and compare the change in price, assuming all other possible variables are equal. Do all sales using location and physical grade adjustments first. Time adjustment should be evident and may be appearing in other sections of your market. Market has been relatively flat for several years, but may be on the verge of a change. 3. Where to stop a land schedule? Consider where your market data runs out. Is this because large parcels are not typically for sale within your town? Consider where does your market (price per acre) seem to stabilize? Your sales and scattergram will begin to show this. 4. Assessing property as one lot or several lots versus valuing as one lot or several lots? When considering the highest and best use of land, it may be more logical to assess lots separately than as one. These lots can be assessed separately, while they are still listed together, in order to conform to the definition of a parcel. Remember to apply your result consistently to all similar properties

63 Questions or Problems You May Encounter: 5. What other checks and balances can you do on your proposed land schedule? Once you have done mathematical and logical checks as thoroughly as possible, you should begin to inspect new residential construction where the property has sold recently. Once you have calculated a cost new on the dwelling, you should be able to test your land schedule and land improvements schedule against the sale prices of these properties. (Typical land to building ratio = 25%/75%) In other words, typically, if someone pays $100,000 for the land and site improvements, they will probably build at least a $300,000 house. Respectively, you can deduce that on average if someone pays $400,000 for a property, at least $100,000 is attributable to the land and site improvements. HOWEVER, THIS IS NOT AN ABSOLUTE. 6. Not enough sales in your town? One option is to consider sales information from similar towns: consider the similarity of the market and what factors may affect differences. Another option is to use the method of abstraction- using a new house that has sold (less than 5 years old- or 10 if absolutely necessary)- attempt to get actual costs. The sale price minus actual costs of construction, including site improvements (well, septic, driveway, electric)= should equal land value. Remember the general rule of thumb of 25% land value.

64 Land Valuation Review

Important things to remember:  A land schedule is a work in progress and must be checked, adjusted and rechecked. You may not be completely satisfied with your land schedule until half way (or more) through a reappraisal or at least until all sales are reviewed and checked (Improved and unimproved).  Land schedules will not be valid into eternity. As the market changes- there may be a need for adjustments to the overall land schedule or portions thereof. (Principles of change and changes in economic factors or Supply and Demand.)  A land schedule, as is the way with all assessing, is only as good as the information you put in and the information you know when you are developing the land schedule. That is why it is crucial to fully inspect and analyze all sales data as many times as necessary.  Always do your land schedule work in pencil. You may need to erase and change things many times! Using an excel spreadsheet on computer will allow you to make changes and sort information easily.  Be prepared to obtain help when needed to develop an accurate land schedule. You may need to hire a contract appraiser or at a minimum seek assistance from your district advisor in completing a land schedule.

65 ANALYSIS - STEP 2 SPECIFIC DATA Market Analysis – Time Adjustments [Example: (67800-65000)/65000 =.043] Comp First Sale Second Sale Percent Months Percent Change between per month sales 1 65000 67800 .0430 10 .0043 2 73400 81800 .1144 24 .0047 3 58000 63500 .0948 21 .0045 4 59500 61100 .0269 7 .0038 5 62200 65500 .053 12 .0044 (Average = sum percent per month (.0217) divide by how many (5)) Average percent per month .0043 x 100 = .43% per month Comp #1 First Sale (10 months ago) 65,000 Current Sale (Present time) 67,800 Increase in value over ten months 2,800 (67,800 - 65,000) / 65000 = .043 x 100 = 4.3% change 67,800-65,000 = 2,800 / 65,000 = .043 / 10 mths = .0043 per month This method is valid if the Lister/Assessor is confident that no other changes to the property, physical or otherwise, have occurred to change the property value. Paired sales analysis represent the same property having sold twice or two sales of very similar properties. This requires the Lister/Assessor to locate properties that are very similar in all locational and physical characteristics.

66