Wayne Valliere, Barnstable Plymouth Appraisal Services

I was visiting a colleague at his office recently and he showed me a pamphlet from a Boston company that offers agents a service with their listing. This company visits the listing with the agent, photographs the interior and exterior of the property, and does a detailed floor sketch. He noted that the market has reacted to the value of pictures and sketches and that agents are paying $240 for this service. So what is the value of the analysis?

What is the value of analyzing the subject property? To determine the type of property bring appraised, the legal description, the name of the owner, the property rights appraised, and the assessment and tax analysis of the subject.

What is the value of the neighborhood and market analysis? Determining neighborhood boundaries, neighborhood characteristics, housing trends, present land use, price values, and age make-up of the neighborhood. Analyzing the market conditions to determine if property values are decreasing, increasing, or stable. Analyzing demand and supply to determine if the market has a shortage or oversupply of available inventory, or is in balance.

What is the value of the site analysis? Determining site dimensions and site size, analyzing and reporting on specific zoning classification and description. Determining if the property is compliant with zoning or considered nonconforming, and whether or not the subject can be rebuilt if destroyed by fire or natural disaster. Analyzing and determining the highest and best use of the subject site as vacant and as improved. Analyzing site utilities to determine if public utilities are available or if private wells and/or private septic systems are common to an area and market accepted. Is the subjects’ road public or private and does it support the subject positively or negatively.

What is the value of the analysis of the site improvements? Determining number of units, number of stories, whether attached or detached, the actual age and if it is existing or proposed. Walking through the property and observing the condition and quality of floors, walls, and ceilings. Observing the subjects social and private areas and analyzing the number of rooms and their functions. Analyzing any remodeling or renovations that have been completed and determining their quality and condition. Observing mechanical items, heating, electrical, plumbing to determine their conditions. Observing the exterior condition of roof, windows, siding, gutters and downspouts. Determining if any part of the improvements need repair or replacement and developing a cost to cure those items.

What is the value of a sales comparison analysis? Completing a sales/resales analysis to determine market conditions. Analyzing a neighborhood for similar listings, pending sales, closed sales, withdrawn and expired listings. Verifying and analyzing the data and sales histories of all the properties used. Determining adjustable differences between the similar properties through pairing sales, extraction method, regression analysis, or other acceptable means; and applying the adjustments to the comparable properties to determine a value from the market.

What is the value of a cost approach? Analyzing land sales or extracting land values from sold properties similar to the subject to estimate the value of the site as if vacant. Estimating the replacement cost new using local builders’ data or national cost services. Estimating accrued depreciation from all causes, (physical deterioration, functional obsolescence, and external obsolescence) and deducting accrued depreciation from the cost of the improvements to arrive at a depreciated value of the improvements. Adding the site value to determine an indicated value by cost.

What is the value of an income approach? Searching for rental properties in the neighborhood that have sold and are similar to the subject. Determine a gross rent multiplier using sales prices and rents and estimate an indicated value by the income approach.

What is the value of reconciling all approaches to value to come up with an opinion of market value that the appraiser certifies? We know what the market will pay for photos and a sketch, but what is the value of an analysis.

Wayne Valliere is the principal of Barnstable Plymouth Appraisal Services, Buzzards Bay, Mass.