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THE APPRAISAL PROCESS <br /> The valuation part of the appraisal process is a series of <br /> "checks" on the appraiser' s judgment. The ' checks are <br /> used as a guide in arriving at a final estimate of "value". <br /> The first appraisal procedure is an estimate of the value <br /> of the vacant land or underlying land in the case of improved <br /> properties, recognizing its highest, best, and most profitable <br /> use. This, then is the "estimate of value" in vacant land. <br /> The market place normally recognized three approaches as <br /> guides for calculating "value." of improved properties . Any <br /> and/or all of these three methods are used, as applicable. <br /> The first appraisal procedure if known as the Cost Approach <br /> to Value. This approach is an emphasis on cost, realizing <br /> that a buyer for the property being appraised has an alterna- <br /> tive of erecting all-new facilities of his choice. After <br /> the cost of all-new facilities has been estimated, the <br /> appraiser then related the subject property to the all-new <br /> facilities , applying "depreciation" factors where applicable. <br /> The second appraisal procedure is known as the Direct Compari- <br /> son Approach to Value, sometimes called the "Market" approach <br /> to value. This approach is a consideration of the subject <br /> property as it competes with sales of other already improved <br /> properties , with the emphasis placed on market sales and/or <br /> offerings of competitive property . This procedure is also <br /> the normal approach to estimating value of vacant or under- <br /> lying land. <br /> The third approach to value is known as the Income Approach <br /> to Value. In this estimate the emphasis is placed on the <br /> investment potential for the subject property , recognizing <br /> the past, present and future income potential for the property. <br /> In this appraisal the value of the subject site, if vacant, <br /> has been estimated. After that estimate all three of the <br /> approaches to value have been considered and applied where <br /> applicable, or explained where not applicable. Following the <br /> application of the approaches is a correlation of the various <br /> approaches and a statement as to the final estimate of value. <br /> i <br />