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DEMONSTRATION APPRAISAL REPORT
SINGLE FAMILY RESIDENCE
3507 Elmwood Place Minnetonka, Minnesota 55345
Professional Admission Subcommittee International Association of Assessing Officers
130 East Randolph Street, Suite 850 Chicago, IL 60601
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
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
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
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
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
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.
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
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.
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.
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.
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.
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