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  • DEMONSTRATION APPRAISAL REPORT

    OFA

    SINGLE FAMILY RESIDENCE

    LOCATED AT

    3507 Elmwood Place Minnetonka, Minnesota 55345

    Prepared for

    Professional Admission Subcommittee International Association of Assessing Officers

    130 East Randolph Street, Suite 850 Chicago, IL 60601

    Prepared by

    _

    Minneapolis, Minnesota 55487

    Date of Appraisal

    June 1, 1994

  • _ .. - --••----- __

    Minneapolis, MN 55487

    June 22, 1998

    Professional Admission Subcommittee International Association of Assessing Officers 130 East Randolph Street, Suite 850 Chicago, IL 60601

    Dear Subcommittee Members:

    Attached is a demonstration appraisal of a single-family dwelling located at 3507 Elmwood Place, Minnetonka, Minnesota 55345 and legally described as:

    The North Thirty feet, front & rear, of Lot 33, also Lot 34, Block 3, Staring's Tonka Wood-Croft, Hennepin, Minn., according to the plat on file and of record in the office of the Registrar of Titles in and for said County.

    This is a complete and self contained appraisal report. It contains 130 pages and an addenda of 19 exhibits. It is presented as a documentation of my knowledge and ability to apply appraisal procedures to an actual property in fulfillment of one of the requirements of the IAAO Professional Designation Program for the Certified Assessment Examiner (CAE) designation. The purpose of the report is to estimate the market value of fee simple title to the encumbered rights of the subject property, as of

    June 1, 1994

    Market value as used in the context of this report is defined as:

    "...The most probable price expressed in terms of money that a property would bring if exposed for sale in the open market in an arm's-length transaction between a willing seller and a willing buyer, both of whom are knowledgeable concerning qi the uses to which the property is adapted and for which it is capable of being used."

    On the basis of my analysis, which is detailed in this report, I estimate the market value of the subject property as of the appraisal date as:

    One Hundred Four Thousand Nine Hundred Dollars

    ($104,900)

    Sincerely,

    r

  • TABLE OF CONTENTS

    Summary of Salient Facts and Conclusions 1

    Identification of Client 3

    Identification of Subject Property 4

    Ownership/Sales History 5

    Property Rights Appraised 6

    Purpose of the Appraisal 7

    Reasonable Exposure Time 8

    Intended Uses and Users of the Appraisal 9

    Extent of the Appraisal 10

    Assumptions and Limiting Conditions 11

    Tax and Assessment Analysis 12

    City & Area Analysis 18

    Neighborhood Analysis 24

    Site Analysis 28

    Improvement Analysis 31

    Actual Age, Effective Age, Total Economic Life Analysis 36

    Support for Total Economic Life & Effective Age Analysis 38

    Highest and Best Use Analysis 43

    The Appraisal Process 50

    Application of the Cost Approach 55

    Introduction 55

    Description of Comparable Land Sales 58

    Adjustments of Comparable Land Sales 63

    Reconciliation of Land Value Estimate 67

  • Estimate of Cost New 68

    Depreciation Analysis 71

    Summary of the Cost Approach 80

    Indicated Value by the Cost Approach 80

    Application of the Income Approach 81

    Introduction 81

    Description of Comparable Rental Sales 83

    Estimate of the Gross Rent Multiplier 89

    Development of Market Rent 91

    Description of Market Rent Data 92

    Selection and Development of Units of Comparison 98

    Summary of Market Rent Adjustments 100

    Estimate of Market Rent 103

    Indicated Value by the Income Approach 104

    Application of the Sales Comparison Approach 105

    Introduction 105

    Selection and Development of Units of Comparison 105

    Description of Comparable Sales Data 107

    Summary of Sales Comparison Adjustments 114

    Indicated Value by the Sales Comparable Approach 123

    Correlation and Final Estimate of Value 125

    Review of Developed Data 125

    Analysis of Strength and Weakness of Each Approach 126

    Final Value Conclusion 128

    Certification 130

  • ADDENDA

    Exhibit A Subject Photographs 131

    Exhibit B Property Types and Classes 134

    Exhibit C United States Map 135

    Exhibit D Regional Map 136

    Exhibit E Location Map 137

    Exhibit F County of Hennepin Map 138

    Exhibit G City of Minnetonka Map 139

    Exhibit H Neighborhood Map 140

    Exhibit I Area Map 141

    Exhibit J Zoning Map 142

    Exhibit K Zoning Ordinance 143

    Exhibit L Survey 157

    Exhibit M Plot Plan 158

    Exhibit N Floor Plan 159

    Exhibit 0 Comparable Land Sales Map 161

    Exhibit P Comparable Rental Sales Map 162

    Exhibit Q Comparable Rental Properties Map 163

    Exhibit R Comparable Sales Map 164

    Qualifications of the Appraiser 165

    Appendix 1 — References 167

  • SUMMARY OF SALIENT FACTS AND CONCLUSIONS

    Purpose of the Appraisal:

    To estimate the market value of the subject property in fee simple title as of June 1, 1994.

    Property Rights Appraised:

    Fee Simple title, free and clear of encumbrances.

    Property Address:

    3507 Elmwood Place, Minnetonka, Minnesota 55345.

    Description of Improvements:

    One-story, wood frame, single family dwelling, built in 1954, with 1,118 square feet on the main level and a single stall attached garage.

    Description of Site:

    Mostly level, rectangular shaped lot, approximately 90 feet by 124 feet, total square footage equals 11,255 square feet.

    Zoning: R-1, Low Density Residential

    Assessed Valuation and Taxes:

    Assessor's 1994 Estimated Market Value $88,600.00 Total 1994 Net Taxes Payable (Homestead) $ 1,405.65 Special Assessments $ 258.37

    Highest and Best Use:

    Site if Vacant - Single Family Residential Site as Improved - Single Family Residential

    Chronological Age: 1954

    Total Economic Life: 95 years

    Effective Age: 40 years

    1

  • Remaining Economic Life: 55 years

    Reproduction Cost New (RCN): $140,853

    Total Depreciation: $67,126

    Depreciated Value of Improvements: $76,400

    Site Value: $33,900

    Indicated Value by Cost Approach: $110,300

    Indicated Value by Income Approach: $102,700

    Indicated Value by Sales Comparison Approach: $104,100

    Final Value Estimate as of June 1, 1994: $104,900

  • IDENTIFICATION OF CLIENT

    The client for whom this appraisal is made is the International Association of Assessing Officers Professional Admission Subcommittee.

    3

  • IDENTIFICATION OF SUBJECT PROPERTY

    Photograph taken June 23, 1995.

    The subject property is a single family residential property located at 3507 Elmwood Place, Minnetonka, Minnesota. The site is a mostly level, rectangular shaped lot, approximately 90 feet by 124 feet. The total square footage of the lot equals 11,255. The improvement is a one-story, wood frame, single family dwelling, built in 1954 by Ecklund and Sweatlund, with 1,118 square feet on the main level and a single stall attached garage.

    The legal description is: The North Thirty feet, front & rear, of Lot 33, also Lot 34, Block 3, Staring's Tonka Wood-Croft, Hennepin, Minn., according to the plat on file and of record in the office of the Registrar of Titles in and for said County.

    The Property Identification Number (PIN) is 17-117-22-42-0027, which is the tax parcel number.

    4

  • OWNERSHIP/SALES HISTORY

    Ernest J. and Anna F. Arnold are the fee owners and occupants since May 28, 1954, as recorded by the Registrar of Titles of Hennepin County, Minnesota. The torrens title is recorded under document number D424652.

    5

  • PROPERTY RIGHTS APPRAISED

    The rights of the subject property being appraised are known as the bundle of rights. These six basic rights associated with ownership are the right to use, to sell, to rent or lease, to enter or leave, to give away, and to refuse to do any of these.

    These legal rights are obtained with fee simple title, which is free and clear of all encumbrances, including easements, right of way, and liens. This title is the greatest possible degree of ownership.

    However, these property rights are subject to certain governmental restrictions such as taxation, eminent domain, escheat, and police power.

    6

  • PURPOSE OF THE APPRAISAL

    The purpose of the appraisal is to estimate the market value of the fee simple estate for the subject property located at 3507 Elmwood Place, Minnetonka, Minnesota, as of June 1, 1994.

    Fee simple estate, as defined in Appraising Residential Properties is:

    "an absolute ownership unencumbered by any other interest or estate. The owner of a fee simple title possesses all the rights and benefits of the real estate subject only to the powers of government, which include taxation, eminent domain, escheat, and police power. The owner of a fee simple title possesses a com

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