What does GRM stand for and how is it calculated?

تطبيق أساليب التقييم الثلاثة: التكلفة، المقارنة البيعية، والدخل

Applying the Three Approaches to Value: Cost, Sales Comparison, and Income

مقدمة للفصل: تطبيق أساليب التقييم الثلاثة: التكلفة، المقارنة البيعية، والدخل

يعتبر التقييم العقاري عملية معقدة تتطلب فهماً شاملاً لمختلف المؤثرات على القيمة، بالإضافة إلى إتقان مجموعة متنوعة من الأساليب والأدوات التحليلية. في سياق دورة "إتقان عملية التسوية في التقييم العقاري: من البيانات إلى القيمة النهائية المقنعة"، يكتسب المشاركون المهارات اللازمة لتحديد وتحليل البيانات ذات الصلة، وتطبيق الحكم السليم للوصول إلى تقدير قيمة نهائي موثوق به. يمثل هذا الفصل جوهر عملية التقييم، حيث يتم فيه تطبيق الأساليب الرئيسية الثلاثة المستخدمة على نطاق واسع في تحديد قيمة العقارات: أسلوب التكلفة، أسلوب المقارنة البيعية، وأسلوب الدخل.

تكمن الأهمية العلمية لهذا الفصل في كونه يوفر إطاراً منظماً لتطبيق هذه الأساليب الثلاثة، مع التركيز على فهم الافتراضات الأساسية لكل أسلوب، ونقاط القوة والضعف لكل منها، وكيفية اختيار الأسلوب الأنسب تبعاً لخصائص العقار موضوع التقييم والبيانات المتاحة. بالإضافة إلى ذلك، يركز الفصل على أهمية التسوية السليمة للبيانات و تطبيق الحكم المهني لتكوين رأي قيمة نهائي موثوق و مقنع، و هذا يتماشى مع الهدف الرئيسي للدورة التدريبية. كما يهدف الفصل إلى تسليط الضوء على الروابط والتكامل بين هذه الأساليب، وكيف يمكن استخدامها معاً للوصول إلى تقدير قيمة أكثر دقة وموثوقية. فمن خلال تطبيق هذه الأساليب، يتمكن المقيم من تحليل سوق العقارات وتحديد القيمة العادلة للعقار قيد الدراسة.

يهدف هذا الفصل إلى تحقيق الأهداف التعليمية التالية:
* شرح مفصل لأسلوب التكلفة: يتضمن ذلك فهم كيفية تقدير قيمة الأرض بشكل منفصل، وتقدير تكلفة استبدال أو إعادة بناء التحسينات، وحساب الاستهلاك المتراكم. وتعتبر هذه العملية بالغة الأهمية في تحديد قيمة العقارات الجديدة نسبياً أو ذات التحسينات الفريدة التي يصعب مقارنتها بعقارات أخرى.
* توضيح آلية عمل أسلوب المقارنة البيعية: يركز على كيفية تحديد العقارات المماثلة (Comparables) التي تم بيعها مؤخراً، وإجراء التعديلات المناسبة على أسعار بيعها لتعكس الاختلافات بينها وبين العقار موضوع التقييم. كما يتم التركيز على أهمية اختيار المقارنات المناسبة وتحليل البيانات بشكل دقيق للوصول إلى تقدير قيمة موثوق.
* تفسير أسلوب الدخل: يتضمن شرح كيفية تقدير قيمة العقارات التي تولد دخلاً من خلال تحليل إيراداتها ومصروفاتها. يتم التركيز على مفاهيم مثل صافي الدخل التشغيلي (NOI) ومضاعف الإيراد الإجمالي (GRM)، وكيفية استخدامها لتحديد قيمة العقار.
* توضيح عملية التسوية والمواءمة: بعد تطبيق الأساليب الثلاثة، سيتم التركيز على كيفية مواءمة المؤشرات المختلفة للوصول إلى رأي قيمة نهائي. يتم التأكيد على أن هذه العملية ليست مجرد متوسط حسابي، بل تتطلب تحليلاً متعمقاً لمدى موثوقية كل أسلوب وملائمته للظروف الخاصة بالعقار موضوع التقييم.
* التأكيد على أهمية الالتزام بمعايير الصناعة: سيتعلم المشاركون كيفية تطبيق هذه الأساليب وفقاً لمعايير التقييم العقاري المعترف بها، لضمان تقديم تقارير تقييم دقيقة وموثوقة.

من خلال استيعاب المفاهيم والمهارات المقدمة في هذا الفصل، سيتمكن المشاركون من تطبيق أساليب التقييم الثلاثة بثقة وكفاءة، والوصول إلى تقديرات قيمة نهائية مقنعة تلبي احتياجات عملائهم وتتوافق مع أفضل الممارسات المهنية.

Applying the Three Approaches to Value: Cost, Sales Comparison, and Income

This chapter delves into the practical application of three fundamental appraisal approaches: the cost approach, the sales comparison approach, and the income approach. Understanding and skillfully utilizing these approaches is crucial for generating reliable and defensible value indicators, a cornerstone of sound appraisal practice as emphasized throughout this "Mastering Appraisal Reconciliation" training course.

The scientific importance of these approaches lies in their grounding in established economic principles. The cost approach, assuming value is derived from the cost to create a similar property, appeals to the principle of substitution and is critical in assignments where limited market data is available, or where legally mandated (e.g., property tax assessment). This approach requires a separate site valuation, aligning with USPAP guidelines. The sales comparison approach, rooted in the principle of supply and demand and market behavior, leverages comparable property data to estimate value by direct comparison and adjustment. This is perhaps the most used, as sales prices of comparable properties are indicators of value for a subject property. This adjustment process requires rigorous analysis of similarity. The income approach, building on the anticipation of future benefits, utilizes income capitalization techniques such as gross rent multipliers to estimate value based on the income-generating potential of a property.

This chapter will methodically guide the student through the application of each approach, linking directly to the course's core objective: defensible property valuation. Emphasis will be placed on how to collect appropriate data, critically analyze that data for reliability and relevance, and apply established methodologies to arrive at distinct value indicators as introduced in previous chapters. By the end of this chapter, students will be equipped to:

• Independently apply the cost, sales comparison, and income approaches to value, understanding the limitations of each, as discussed in the course description.
• Identify and analyze the data requirements unique to each approach, in adherence to industry standards.
• Understand the role of site valuation in the cost and income approaches.
• Prepare the ground for the final reconciliation process, which will allow a proper application of each approach.

تطبيق أساليب التقييم الثلاثة: التكلفة، المقارنة البيعية، والدخل

Applying the Three Approaches to Value: Cost, Sales Comparison, and Income

الفصل: تطبيق أساليب التقييم الثلاثة: التكلفة، المقارنة البيعية، والدخل

مقدمة

في سياق دورة "إتقان عملية التسوية في التقييم العقاري: من البيانات إلى القيمة النهائية المقنعة"، يمثل هذا الفصل جوهر عملية التقييم العقاري. سنستكشف بعمق كيفية تطبيق أساليب التقييم الرئيسية الثلاثة: التكلفة، المقارنة البيعية، والدخل. الهدف هو تزويد المشاركين بالمعرفة والمهارات اللازمة لتحليل البيانات، وفهم مؤشرات القيمة المختلفة، واستخدام الحكم المهني للوصول إلى تقدير قيمة نهائي موثوق به. هذا الفصل ضروري لتحقيق الهدف العام للدورة، وهو الارتقاء بمهارات التقييم العقاري للمشاركين ليصبحوا خبراء تقييم موثوقين.

أولاً: أسلوب التكلفة (Cost Approach)

• 1.1 النظرية الأساسية:

  • يعتمد أسلوب التكلفة على مبدأ الاستبدال (Substitution)، والذي ينص على أن قيمة العقار لا تتجاوز تكلفة الحصول على بديل بنفس الفائدة. بعبارة أخرى، يفترض هذا الأسلوب أن قيمة العقار المحسن تساوي قيمة الأرض + تكلفة إنشاء التحسينات (المباني) الجديدة – أي استهلاك (Depreciation) لهذه التحسينات.
  • يمثل هذا الأسلوب أحد الركائز الأساسية لعملية التقييم، خاصةً للعقارات الجديدة أو المتخصصة حيث تتوفر بيانات سوق محدودة للمقارنة.

  • يمكن التعبير عن هذه العملية بالصيغة التالية:

    • Property Value = Site Value + Replacement Cost – Depreciation

• 1.2 مكونات أسلوب التكلفة:

  • 1.2.1 قيمة الأرض (Site Value):

    • يتم تقدير قيمة الأرض بشكل منفصل باستخدام أسلوب المقارنة البيعية بشكل رئيسي.
    • يتطلب ذلك تحليل مبيعات الأراضي المماثلة في المنطقة مع إجراء التعديلات اللازمة على أساس الموقع، والحجم، والوصول إلى المرافق، وأي قيود قانونية.
    • هذا التقدير ضروري للحصول على البيانات اللازمة لأساليب التقييم الأخرى، مثل تقنية الدخل المتبقي للمبنى (Building Residual Technique).
    • يُستخدم هذا التقدير أيضًا لتلبية المتطلبات القانونية في تقييمات الضرائب العقارية وأغراض المصادرة.

  • 1.2.2 تكلفة الاستبدال (Replacement Cost):

    • يتم تقدير تكلفة استبدال التحسينات القائمة (المباني) كما لو كانت جديدة تمامًا بتاريخ التقييم.
    • تشمل هذه التكلفة جميع المصاريف المباشرة وغير المباشرة المتعلقة بالبناء، مثل تكاليف المواد، والعمالة، والرسوم الهندسية، والتراخيص، والإشراف.
    • تتوفر العديد من المصادر لتقدير تكلفة الاستبدال، بما في ذلك خدمات التكلفة المتخصصة، والمقاولون المحليون، والبيانات التاريخية.

  • 1.2.3 الاستهلاك (Depreciation):

    • الاستهلاك هو الفرق في القيمة بين تكلفة الاستبدال (الجديدة) للتحسينات وقيمتها الحالية.
    • يمثل الاستهلاك فقدان القيمة بسبب عوامل مختلفة، بغض النظر عن السبب.
    • هذا هو الجزء الأكثر تحديًا في أسلوب التكلفة، خاصة بالنسبة للتحسينات القديمة أو تلك التي لا تتوافق مع الاستخدام الأمثل للأرض كما لو كانت شاغرة.
    • هناك ثلاثة أنواع رئيسية من الاستهلاك:
      • الاستهلاك المادي (Physical Deterioration): فقدان القيمة بسبب التدهور الفعلي للتحسينات بمرور الوقت، مثل تدهور المواد، والتشققات، والتآكل.
      • الاستهلاك الوظيفي (Functional Obsolescence): فقدان القيمة بسبب أوجه القصور في التصميم، أو عدم كفاية المرافق، أو устаревание التصميمات.
      • الاستهلاك الخارجي (External Obsolescence): فقدان القيمة بسبب عوامل خارجية خارج نطاق العقار نفسه، مثل التغيرات في الظروف الاقتصادية، أو زيادة حركة المرور، أو التلوث البيئي.

• 1.3 التطبيقات العملية والتجارب ذات الصلة:

  • يستخدم أسلوب التكلفة بشكل شائع لتقييم العقارات الجديدة، والمباني المتخصصة (مثل المدارس والمستشفيات)، والعقارات المؤمن عليها.
  • مثال: تقييم مبنى مكتبي جديد: يتم تقدير قيمة الأرض باستخدام أسلوب المقارنة البيعية، ثم يتم تقدير تكلفة بناء المبنى الجديد باستخدام خدمات التكلفة المتخصصة. يتم احتساب الاستهلاك (عادةً ما يكون صغيرًا أو معدومًا) بناءً على عمر المبنى وحالته.

• 1.4 الصيغ والمعادلات:

  • Property Value = Site Value + Replacement Cost – Depreciation
  • Depreciation = Physical Deterioration + Functional Obsolescence + External Obsolescence

• 1.5 ملاحظات مهمة:

  • يتطلب أسلوب التكلفة تقديرًا دقيقًا لتكلفة الاستبدال والاستهلاك.
  • يعتبر هذا الأسلوب أقل موثوقية للعقارات القديمة بسبب صعوبة تقدير الاستهلاك بدقة.
  • يجب أن يعكس تقدير الاستهلاك جميع أوجه القصور المادية والوظيفية والخارجية.

ثانياً: أسلوب المقارنة البيعية (Sales Comparison Approach)

• 2.1 النظرية الأساسية:

  • يعتمد أسلوب المقارنة البيعية، المعروف أيضًا باسم أسلوب السوق أو أسلوب بيانات السوق، على مبدأ العرض والطلب (Supply and Demand).
  • تعتمد هذه الطريقة على تحليل مبيعات العقارات المماثلة ("المقارنات") في السوق لتحديد قيمة العقار موضوع التقييم.
  • يفترض هذا الأسلوب أن المشترين المحتملين سيقارنون بين العقار موضوع التقييم والعقارات المتاحة الأخرى في السوق وسيدفعون سعرًا مشابهًا للعقارات المماثلة.

• 2.2 خطوات تطبيق أسلوب المقارنة البيعية:

  • 2.2.1 تحديد المقارنات (Comparables):

    • يجب أن تكون المقارنات مشابهة للعقار موضوع التقييم من حيث الموقع، والحجم، والتصميم، والعمر، والحالة، والاستخدام.
    • يجب أن تكون المقارنات قد بيعت حديثًا (عادةً خلال الأشهر الستة الماضية).
    • يجب أن تكون مبيعات "أيدي أجنبية" (Arm's length transaction)، أي أن تكون المعاملة بين أطراف مستقلة وبشروط سوق عادية.
    • من الضروري تحليل عدد كاف من المقارنات للحصول على تقدير قيمة موثوق به.

  • 2.2.2 إجراء التعديلات (Adjustments):

    • نادرًا ما تكون هناك مقارنات متطابقة تمامًا للعقار موضوع التقييم. لذلك، يجب إجراء تعديلات على أسعار بيع المقارنات لتعكس أي اختلافات بينها وبين العقار موضوع التقييم.
    • تتضمن أنواع التعديلات الشائعة:
      • تاريخ البيع (Date of Sale): لتعويض التغيرات في ظروف السوق بمرور الوقت.
      • الموقع (Location): لتعويض الاختلافات في جاذبية الموقع، مثل القرب من المرافق، أو المدارس، أو الضوضاء.
      • الخصائص الفيزيائية (Physical Characteristics): لتعويض الاختلافات في الحجم، والتصميم، والعمر، والحالة، والميزات.
      • شروط البيع (Conditions of Sale): لتعويض شروط البيع غير العادية، مثل التمويل الميسر، أو عمليات البيع القسري.
    • يتم إجراء التعديلات إما كقيم نقدية أو كنسب مئوية.

  • 2.2.3 التسوية (Reconciliation):

    • بعد إجراء التعديلات على أسعار بيع المقارنات، يتم تسوية القيم المعدلة لتحديد نطاق قيمة للعقار موضوع التقييم.
    • يتم إعطاء وزن أكبر للمقارنات التي تتطلب أقل عدد من التعديلات وتلك التي تعتبر الأكثر تشابهًا مع العقار موضوع التقييم.

• 2.3 الصيغة الأساسية:

  • Subject Value = Comparable Sales Price +/- Adjustments

• 2.4 التطبيقات العملية والتجارب ذات الصلة:

  • يستخدم أسلوب المقارنة البيعية على نطاق واسع لتقييم المنازل السكنية، والأراضي، والمباني التجارية.
  • مثال: تقييم منزل سكني: يتم البحث عن مبيعات مماثلة حديثة لمنازل مماثلة في نفس الحي. إذا كان أحد المنازل المماثلة يحتوي على حمام إضافي بينما لا يحتوي العقار موضوع التقييم على ذلك، فسيتم خصم قيمة الحمام الإضافي من سعر بيع المنزل المماثل.

• 2.5 اعتبارات مهمة:

  • يعتمد أسلوب المقارنة البيعية على توافر بيانات مبيعات كافية وموثوقة.
  • قد يكون من الصعب إجراء تعديلات دقيقة، خاصةً بالنسبة للاختلافات الكبيرة بين العقار موضوع التقييم والمقارنات.
  • يتطلب هذا الأسلوب فهمًا جيدًا للسوق المحلية والقدرة على تحليل بيانات المبيعات بشكل صحيح.

ثالثاً: أسلوب الدخل (Income Approach)

• 3.1 النظرية الأساسية:

  • يعتمد أسلوب الدخل على مبدأ التوقع (Anticipation)، والذي ينص على أن قيمة العقار تتحدد بمقدار الدخل الذي يمكن أن يحققه.
  • يستخدم هذا الأسلوب بشكل أساسي لتقييم العقارات التي تدر دخلًا، مثل المباني السكنية المؤجرة، والمكاتب، والمحلات التجارية.

• 3.2 الطرق الرئيسية لأسلوب الدخل:

  • 3.2.1 مضاعف إجمالي الإيجار (Gross Rent Multiplier - GRM):

    • يستخدم GRM لتقييم العقارات السكنية المؤجرة.
    • يتم حساب GRM عن طريق قسمة سعر بيع العقار المماثل على دخله الشهري أو السنوي الإجمالي.
    • يتم بعد ذلك تطبيق متوسط GRM الذي تم الحصول عليه من المقارنات على الدخل الإجمالي للعقار موضوع التقييم لتقدير قيمته.
    • GRM = Sales Price / Gross Income
    • Property Value = GRM x Subject's Gross Income

  • 3.2.2 رسملة الدخل المباشرة (Direct Capitalization):

    • تُستخدم هذه الطريقة لتقييم العقارات التجارية.
    • يتم تقدير صافي الدخل التشغيلي (Net Operating Income - NOI) للعقار.
    • يتم بعد ذلك قسمة NOI على معدل الرسملة (Capitalization Rate - Cap Rate) لتقدير قيمة العقار.
    • NOI = Gross Income - Operating Expenses
    • Property Value = NOI / Cap Rate

• 3.3 مثال تطبيقي:

  • تقييم شقة سكنية: يتم جمع بيانات مبيعات العقارات المماثلة المؤجرة في المنطقة. يتم حساب GRM لكل عقار مماثل. يتم تطبيق متوسط GRM على الدخل الشهري الإجمالي للعقار موضوع التقييم لتقدير قيمته.
  • مثال: إذا كان متوسط GRM هو 135 وكان الدخل الشهري الإجمالي للعقار موضوع التقييم هو 1525 دولارًا، فإن القيمة المقدرة ستكون 135 * 1525 = 206,000 دولارًا.

• 3.4 اعتبارات مهمة:

  • يتطلب أسلوب الدخل تقديرًا دقيقًا للدخل والمصروفات.
  • يعتمد هذا الأسلوب على توافر بيانات دخل ومصروفات كافية وموثوقة.
  • يعتبر اختيار معدل الرسملة المناسب أمرًا بالغ الأهمية لتقدير قيمة دقيق.

رابعاً: التسوية (Reconciliation)

• 4.1 أهمية التسوية:

  • بعد تطبيق أساليب التقييم الثلاثة، غالبًا ما يتم الحصول على مؤشرات قيمة مختلفة للعقار موضوع التقييم.
  • التسوية هي عملية تحليل مؤشرات القيمة المختلفة هذه واختيار الأنسب منها للوصول إلى تقدير قيمة نهائي.
  • التسوية ليست مجرد متوسط بسيط للقيم التي تم الحصول عليها من الأساليب المختلفة. بل تتطلب حكمًا مهنيًا وتقييمًا لموثوقية كل أسلوب.

• 4.2 عملية التسوية:

  • 4.2.1 تحليل المشكلة التقييمية:

    • يجب على المثمن مراجعة جميع جوانب عملية التقييم، بما في ذلك الغرض من التقييم، وتعريف القيمة، ونطاق العمل.

  • 4.2.2 تقييم موثوقية الأساليب:

    • يجب تقييم موثوقية كل أسلوب تقييم بناءً على توافر البيانات ونوع العقار.
    • على سبيل المثال، قد يكون أسلوب المقارنة البيعية هو الأنسب لتقييم المنازل السكنية، في حين أن أسلوب الدخل قد يكون الأنسب لتقييم العقارات التجارية.

  • 4.2.3 إعطاء الوزن المناسب:

    • يجب إعطاء وزن أكبر لمؤشرات القيمة التي تعتبر أكثر موثوقية وملاءمة للمشكلة التقييمية.
    • يجب تبرير الوزن الممنوح لكل أسلوب في تقرير التقييم.

• 4.3 مثال:

  • بعد تطبيق أساليب التقييم الثلاثة، حصل المثمن على مؤشرات القيمة التالية:
    • أسلوب التكلفة: 150,000 دولار
    • أسلوب المقارنة البيعية: 145,200 دولار
    • أسلوب الدخل: 144,500 دولار
  • نظرًا لأن مؤشرات القيمة متقاربة نسبيًا، فقد يستنتج المثمن أن قيمة العقار تقع بين 144,500 دولارًا و 150,000 دولارًا. ومع ذلك، يجب على المثمن النظر في العوامل الأخرى التي قد تؤثر على القيمة، مثل الغرض من التقييم.
    • إذا كان التقييم سيستخدم من قبل مستثمر يبحث عن عقار مدر للدخل، فقد يتم إعطاء وزن أكبر لمؤشر القيمة الناتج عن أسلوب الدخل.
    • إذا كان التقييم سيستخدم للمساعدة في تأهيل المشتري للحصول على قرض سكني، فقد يتم اعتبار أسلوب المقارنة البيعية هو الأكثر موثوقية.

خاتمة

يعد تطبيق أساليب التقييم الثلاثة: التكلفة، المقارنة البيعية، والدخل، مهارة أساسية للمثمنين العقاريين. يتطلب إتقان هذه الأساليب فهمًا عميقًا للنظريات والمبادئ الأساسية، بالإضافة إلى القدرة على تحليل البيانات واستخدام الحكم المهني. من خلال دراسة هذا الفصل، سيتمكن المشاركون في دورة "إتقان عملية التسوية في التقييم العقاري" من تعزيز مهاراتهم ليصبحوا خبراء تقييم موثوقين ومؤهلين لتقديم تقديرات قيمة دقيقة ومقنعة.

Chapter 6: Applying the Three Approaches to Value: Cost, Sales Comparison, and Income

Introduction

Welcome to Chapter 6 of "Mastering Appraisal Reconciliation: From Data to Defensible Value." In this chapter, we will apply the three core approaches to value: Cost, Sales Comparison, and Income. This is where the theoretical knowledge we've gathered transforms into practical application, resulting in value indicators. Remember, this course aims to equip you with the tools to analyze these value indicators, reconcile them effectively, and reach a defensible final value opinion – all while adhering to industry standards. We will emphasize how these approaches relate to each other, their individual strengths and weaknesses, and how a thorough understanding of each allows for a more reliable reconciliation process.

I. The Cost Approach: Building Value from the Ground Up

The Cost Approach is grounded in the economic principle of substitution. A buyer will pay no more for a property than the cost to acquire an equivalent substitute. This approach is especially useful for new or unique properties where comparable sales data is scarce, or for properties where the improvements are relatively new and depreciation is minimal.

A. Scientific Basis and Principles

• Principle of Substitution: A rational investor will not pay more for an asset than the cost to obtain a similar asset of equal utility.
• Cost Theory of Value: Value is directly related to the cost of production. This is most applicable when market conditions are stable and costs are relatively predictable.
• Depreciation: This accounts for the loss in value of an asset due to physical deterioration, functional obsolescence, and external obsolescence. Understanding depreciation is paramount in the cost approach.

B. The Cost Approach Formula

The fundamental formula is:

• Property Value = Land Value + Cost New of Improvements - Accrued Depreciation

  Where:

  • Land Value: The value of the site as if vacant and available for its highest and best use. This requires a separate site valuation (see Section V below).
  • Cost New of Improvements: The estimated cost to construct a replica or replacement of the existing improvements.
  • Accrued Depreciation: The total loss in value of the improvements from all causes.

C. Estimating Costs

Several methods exist for estimating the "Cost New of Improvements:"

1. Quantity Survey Method: A detailed breakdown of all labor and materials needed to construct the improvements. This is the most accurate but also the most time-consuming method.
2. Unit-in-Place Method: Estimates the cost of individual building components (e.g., walls, floors) based on installed unit costs.
3. Comparative Unit Method: Applies a cost per square foot or cubic foot derived from similar construction projects. This is a common method for residential appraisals.

D. Calculating Accrued Depreciation: A Deep Dive

Estimating depreciation is often the most challenging aspect of the Cost Approach. There are three types of depreciation to consider:

1. Physical Deterioration: Loss in value due to wear and tear, age, and deferred maintenance. This can be further divided into:

   • Curable: Items that are economically feasible to repair or replace (e.g., painting, roof repairs).
   • Incurable: Items that are not economically feasible to repair or replace (e.g., structural damage in an old building).
   • Formula: Depreciation = Effective Age / Total Economic Life
     2. Functional Obsolescence: Loss in value due to design flaws, outdated equipment, or changes in market preferences.
   • Curable: Modernizing the floor plan, adding new features to bring back more buyers
   • Incurable: High ceilings in house may cause additional heating costs to the occupant
     3. External (Economic) Obsolescence: Loss in value due to factors external to the property, such as changes in zoning, environmental issues, or neighborhood decline. This is generally incurable.

E. Practical Application and Experiments

• Example: Appraising a new custom home.
  • Land Value: $100,000 (determined via Sales Comparison).
  • Cost New: $300,000 (estimated using the Comparative Unit Method).
  • Accrued Depreciation: Minimal, as the home is new. Assume $5,000 for minor settling cracks (physical-curable)
  • Value Indication: $100,000 + $300,000 - $5,000 = $395,000
• Experiment: Cost Estimating Accuracy. Obtain cost estimates from multiple contractors for a hypothetical building project using different cost estimating methods. Compare the results to actual construction costs to assess the accuracy of each method.

II. The Sales Comparison Approach: Mirroring the Market

The Sales Comparison Approach is the most widely used and often the most reliable approach, especially when an active and well-documented market provides ample comparable sales data. It operates on the principle that a buyer will pay no more for a property than what similar properties have recently sold for.

A. Scientific Basis and Principles

• Principle of Substitution: A buyer will pay no more for a property than they would for another, similar one
• Market Efficiency: The market reflects the collective knowledge and behavior of buyers and sellers.
• Supply and Demand: Market prices are influenced by the interaction of supply and demand factors.

B. The Sales Comparison Formula

• Subject Value = Comparable Sales Price +/- Adjustments

C. Selecting Comparable Sales

Crucial to this approach is identifying genuinely "comparable" properties. Key considerations:

1. Proximity: Located in the same or similar neighborhood.
2. Similarity: Similar physical characteristics (size, age, features, condition), zoning, and use.
3. Time of Sale: Sold recently (ideally within the last 6 months). Adjustments must be made for the market based on the dates of the comparable's sales to the date of value of the subject.
4. Arm's Length Transaction: Sold under typical market conditions, with no undue influence from either buyer or seller.

D. Making Adjustments: The Art and Science

The sales prices of comparable properties must be adjusted to account for differences between them and the subject property. Types of Adjustments:

1. Quantitative Adjustments: Based on measurable differences (e.g., square footage, number of bedrooms, lot size).
   • Paired Sales Analysis: Analyzes sales of properties that are nearly identical except for one characteristic to isolate the market value of that characteristic.
2. Qualitative Adjustments: Based on subjective assessments (e.g., condition, view, location).
   • Utilize Market Knowledge - Appraisers use their expertise and knowledge to understand how different characteristics contribute to price for buyers, in order to make adjustments to the comparable values
     E. Practical Application and Experiments

• Example: Adjusting for Bathroom differences: A comparable property has two bathrooms, while the subject has only one. Market data indicates that an extra bathroom contributes $5,000 to value. If the comparable sold for $145,000, the adjusted value for the subject would be $140,000 ($145,000 - $5,000).
• Experiment: Adjustments for lot size, with two sales having all features that are similar, with each having different lot sizes, to see the correlation.

III. The Income Approach: Value as a Stream of Revenue

The Income Approach is based on the premise that the value of a property is directly related to its ability to generate income. This approach is most applicable to income-producing properties such as apartments, office buildings, and retail centers.

A. Scientific Basis and Principles

• Principle of Anticipation: The value of an asset is based on the anticipated future benefits (income) it will provide.
• Present Value: The value of future income streams discounted back to their present worth.
• Capitalization: The process of converting an income stream into an estimate of value.

B. Gross Rent Multiplier (GRM)

The Gross Rent Multiplier (GRM) is a simplified method often used for residential income properties. It relates the sale price of a property to its gross rental income.

1. Calculate GRM: Divide the sale price of comparable properties by their gross monthly rent (Sale Price / Gross Monthly Rent = GRM).
2. Apply GRM: Select a multiplier from the range determined by comparables and multiply it by the subject property's gross monthly income.

Subject Value = Subject Property Gross Monthly Rent * Selected GRM

C. Practical Application and Experiments

• Example:

  1. Comparable Rental Sales (Sale Price / Gross Monthly Rent) :

     Sale 1: 150,000/ 1,200 = GRM 125
     Sale 2: 180,000/ 1,400 = GRM 129
     Sale 3: 200,000/1,500 = GRM 133
     From Market conditions, a GRM of 130 is determined for Subject
     2. Subject property monthly rent is 1,600 dollars. Subject Property Price = 1,600 * 130 = 208,000 Dollars

IV. Interrelationship Between Approaches and the Importance of Reconciliation

It's crucial to understand that the three approaches are not mutually exclusive. They should be viewed as complementary tools. In reconciliation, we don't simply average the value indicators. We weigh the reliability and relevance of each approach based on the specific appraisal problem, data availability, and market conditions.

• Data Reliability: How trustworthy is the data? Is it from reliable sources and cross validated with multiple sources?
• Approach Relevance: How well does an approach describe market condition? Is an income approach suitable for a new building that has not been leased yet?

V. The Essential Requirement of Site Valuation

As noted in the book content, both the Cost Approach and the Land Residual Technique of the Income Approach require a separate estimate of site value. Therefore, understanding the methods of Site Valuation is critical, as discussed in Chapter 5.

A. Methods of Site Valuation

1. Sales Comparison Method: Most reliable, comparable land sales.
2. Allocation Method: Percentage of total property value attributed to land.
3. Extraction Method: Deducting depreciated improvement cost from total sale.
4. Development Method: Discounted cash flow analysis of potential land development.
5. Land Residual Method: Capitalizing income attributable to land.

VI. Addressing Uncertainty and Defensibility

Throughout this chapter, we've emphasized the importance of sound judgment, data verification, and proper application of appraisal principles. To ensure defensibility:

• Clearly document all data sources and assumptions.
• Provide a transparent explanation of the adjustment process.
• Articulate the rationale for weighting different value indicators during reconciliation.
• Comply with USPAP standards.

VII. Conclusion

You've now acquired the fundamental knowledge to apply the three approaches to value: Cost, Sales Comparison, and Income. By understanding the scientific principles underlying each approach, mastering the practical application techniques, and recognizing the importance of site valuation and defensibility, you are well on your way to mastering appraisal reconciliation.

In the next chapter, we will delve into the art and science of Reconciliation, bringing together everything we've learned to arrive at a credible final value opinion.

ملخص علمي مفصل للفصل "تطبيق أساليب التقييم الثلاثة: التكلفة، المقارنة البيعية، والدخل"

مقدمة:

يتناول هذا الفصل من دورة "إتقان عملية التسوية في التقييم العقاري: من البيانات إلى القيمة النهائية المقنعة" كيفية تطبيق الأساليب الرئيسية الثلاثة للتقييم العقاري: التكلفة، المقارنة البيعية، والدخل. يهدف الفصل إلى تمكين المتدربين من الانتقال من جمع البيانات الأولية إلى تحديد مؤشرات القيمة التي ستساهم في الوصول إلى رأي قيمة نهائي موثوق به، مع الأخذ في الاعتبار موثوقية وملاءمة كل طريقة تقييم.

النقاط العلمية الرئيسية:

1. أهمية التقييم المستقل للموقع: يؤكد الفصل على ضرورة إجراء تقييم منفصل للموقع في حال استخدام أسلوب التكلفة أو تقنية "باقي المبنى" في رسملة الدخل. هذا التقييم المستقل ضروري للحصول على بيانات دقيقة وموثوقة لأساليب التقييم هذه. كما ان هذا التقييم مطلوب في بعض الحالات بموجب القانون.

2. أسلوب التكلفة: يشرح الفصل أن أسلوب التكلفة يقوم على تقدير قيمة العقار من خلال جمع قيمة الأرض مع تكلفة بناء التحسينات الجديدة مطروحًا منها أي استهلاك أصاب هذه التحسينات. الصعوبة الأساسية تكمن في تقدير الاستهلاك المتراكم بدقة، خاصة بالنسبة للعقارات القديمة أو التي لا تتوافق مع الاستخدام الأمثل للأرض كما لو كانت خالية.

3. أسلوب المقارنة البيعية: يوضح الفصل أن أسلوب المقارنة البيعية (أو السوقي) يعتمد على تحليل أسعار بيع عقارات مماثلة ("العقارات المقارنة") في السوق. يركز هذا الأسلوب على تحديد الخصائص الهامة للعقارات المقارنة وإجراء تعديلات مناسبة على أسعارها لتعكس أي اختلافات جوهرية بينها وبين العقار موضوع التقييم.

4. أسلوب الدخل: يبين الفصل أن أسلوب الدخل يفترض أن قيمة العقار مرتبطة بشكل مباشر بالدخل الذي يمكن أن يولده. ويستخدم هذا الأسلوب الدخل الصافي أو الدخل الإجمالي. وفي تقييم العقارات السكنية، يعتمد المقيمون عادة على "مضاعف الإيجار الإجمالي" لتحديد القيمة.

5. المصالحة بين مؤشرات القيمة: بعد تطبيق الأساليب الثلاثة، يجب على المقيم "المصالحة" بين مؤشرات القيمة المختلفة التي تم الحصول عليها. المصالحة ليست مجرد متوسط حسابي بسيط للنتائج، بل هي عملية تحليل وتقييم شاملة لمدى موثوقية كل أسلوب والبيانات التي تم استخدامها، مع إعطاء وزن أكبر للأساليب الأكثر ملاءمة وموثوقية في الحالة الخاصة بالعقار قيد التقييم.

الاستنتاجات:

• تطبيق الأساليب الثلاثة للتقييم العقاري يتطلب فهمًا عميقًا لفرضيات كل أسلوب، ونقاط قوته وضعفه، وكيفية جمع البيانات وتحليلها بشكل دقيق وموثوق.

• لا يوجد أسلوب واحد "صحيح" دائمًا؛ يعتمد اختيار الأسلوب الأنسب على طبيعة العقار، وتوافر البيانات، والغرض من التقييم.

• المصالحة بين مؤشرات القيمة المختلفة هي خطوة حاسمة تتطلب خبرة وحكمًا سليمين من المقيم، وتستند إلى تقييم شامل للعملية برمتها.

الآثار المترتبة على الموضوع (مرتبطة بوصف الدورة التدريبية):

• التقييم الدقيق والمقنع: يتيح تطبيق الأساليب الثلاثة بشكل صحيح للمقيمين الوصول إلى تقييمات دقيقة ومقنعة، مما يزيد من مصداقية تقارير التقييم.

• تحليل مؤشرات القيمة: يتعلم المتدربون كيفية تحليل وتقييم مؤشرات القيمة المختلفة التي ينتجها كل أسلوب، وكيفية معالجة أوجه عدم اليقين المرتبطة بكل منها.

• الحكم السليم: يشدد الفصل على أهمية ممارسة الحكم السليم في كل مرحلة من مراحل عملية التقييم، بدءًا من اختيار الأسلوب الأنسب ومرورًا بجمع البيانات وتحليلها، وصولًا إلى المصالحة بين مؤشرات القيمة.

• الامتثال لمعايير الصناعة: يساعد فهم وتطبيق هذه الأساليب المقيمين على الامتثال لمعايير الصناعة، مما يضمن جودة وموثوقية تقارير التقييم.

• الارتقاء بالمهارات: من خلال إتقان هذه الأساليب، يمكن للمقيمين الارتقاء بمهاراتهم ليصبحوا خبراء تقييم موثوق بهم.

موجز:
يلخص هذا الفصل المكونات الأساسية لعملية التقييم العقاري، بدءًا من جمع البيانات وتقييم الاستخدام الأمثل، وصولًا إلى تطبيق أساليب التقييم الثلاثة: التكلفة، والمقارنة البيعية، والدخل. ويؤكد على ضرورة إجراء تقييم منفصل للموقع، وفهم الافتراضات الأساسية الكامنة وراء كل طريقة تقييم، واستخدام الحكم السليم في المصالحة بين مؤشرات القيمة المختلفة للوصول إلى تقدير قيمة نهائي موثوق به. من خلال إتقان هذه الأساليب، يمكن للمقيمين تعزيز خبراتهم وتقديم تقييمات دقيقة ومقنعة تلتزم بمعايير الصناعة.

4. list the design factors that appraisers must consider in kitchens, bathrooms, and bedrooms,
5. describe the characteristics of different types of foundations, including appropriate materials and construction techniques,
6. list common types of framing and siding, and understand their advantages and disadvantages,
7. identify common door and window types, and their impact on value and energy efficiency,
8. describe methods for insulating and ventilating a house, and
9. understand how appraisers rate the overall quality of a building.
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   Chapter 7
   CHAPTER OUTLINE
   I. CLASSIFICATION OF HOUSES (p. 215)
   A. Types of Houses (p. 215)
10. One-Story House (p. 216)
11. One and One-Half Story House (p. 217)
12. Two-Story House (p. 217)
13. Split-Level House (p. 217)
14. Bi-Level House (p. 218)
    II. ARCHITECTURAL STYLES (p. 218)
    A. Compatibility (p. 220)
    III. ELEMENTS OF HOUSE DESIGN (p. 221)
    A. Siting (p. 221)
    B. Interior Functional Zone (p. 222)
    C. Room Characteristics (p. 224)
15. Kitchens (p. 224)
16. Laundry/Utility Rooms (p. 225)
17. Living Rooms (p. 225)
18. Family Rooms (p. 225)
19. Dining Rooms (p. 226)
20. Bedrooms (p. 226)
21. Bathrooms (p. 226)
    IV. CONSTRUCTION METHODS AND MATERIALS (p. 227)
    A. Foundations (p. 227)
22. Types of Foundations (p. 227)
23. Foundation Materials (p. 229)
    B. Framing and Sheathing (p. 229)
24. Framing Lumber (p. 230)
25. Framing Terminology (p. 232)
26. Framing Methods (p. 232)
    a. Roof Framing (p. 233)
    b. Chimneys, Stacks, and Vents (p. 235)
27. Sheathing (p. 235)
    C. Exterior Finishes (p. 235)
    D. Doors and Windows (p. 236)
28. Doors (p. 236)
29. Windows (p. 236)
    E. Insulation (p. 239)
    F. Ventilation (p. 239)
    G. Interior Finishes (p. 240)
30. Wall Finishes (p. 240)
31. Floor Finishes (p. 240)
32. Cabinets and Countertops (p. 240)
33. Interior Trim (p. 241)
    H. Plumbing (p. 241)
    214
    Residential Construction
34. Green Machines (Tankless Water Heaters) (p. 242)
    I. Heating and Air Conditioning (p. 242)
    J. Electrical (p. 242)
    K. Quality (p. 243)
    V. CHAPTER SUMMARY (p. 244)
    VI. CHAPTER QUIZ (p. 247)
35. list the design factors that appraisers must consider in kitchens, bathrooms, and bedrooms,
36. describe the characteristics of different types of foundations, including appropriate materials and construction techniques,
37. list common types of framing and siding, and understand their advantages and disadvantages,
38. identify common door and window types, and their impact on value and energy efficiency,
39. describe methods for insulating and ventilating a house, and
40. understand how appraisers rate the overall quality of a building.
    I. Classification of Houses
    Houses are generally classified on the basis of four characteristics: the number of units, whether the building is attached or detached, the number of stories and the architectural style.
    The NUMBER OF UNITS refers to the number of separate households that the building is designed to accommodate. Although usage may vary in different areas, the term “house” is most often used to refer to a SINGLE-FAMILY RESIDENCE. If a building has multiple units that share a common access and other common areas, it is usually referred to as an APARTMENT BUILDING.
    A DETACHED HOUSE is one that is not connected to any other property. ATTACHED HOUSES share one or more walls, called “party walls,” that are jointly owned by the two adjoining properties. ROW HOUSES, common in many urban areas, are an example of attached dwellings. Ownership of an attached dwelling often involves a PARTY WALL AGREEMENT, which assigns responsibility for maintenance and repair of the party wall(s) (see Figure 7-1).
    A. TYPES OF HOUSES
    The “type of house” refers to the number of stories or levels in the house, and their relationship to each other.
    Although modern construction methods allow for all sorts of variations, the vast majority of houses fall into five basic “type” categories (see Figure 7-2):
41. one-story,
42. one and one-half story,
43. two-story,
44. split-level, and
45. bi-level (also known as split-entry or raised ranch).
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    Chapter 7
    Figure 7-1
    Attached Houses
    Multiples (Apartments)
    Town House
    Duplexes Row House
    Illustrations courtesy of Marshall & Swift
    Figure 7-2
    Types of Houses
    One Story
    Bi-Level
    One and One-Half Story
    Two Story
    Illustrations courtesy of Marshall & Swift
    Split Level
46. One-Story House
    A ONE-STORY HOUSE, often called a “ranch” or “rambler,” has its entire living area on the ground floor. It may or may not have a BASEMENT, which is a room of full story height located below the first floor, at least partially below ground level, and primarily not used for living accommodations.
    216
    Residential Construction
    The advantages of one-story houses include: ease of exterior maintenance, flexibility of floor plan design and the fact that there are no stairs to climb.
    On the down side, this type of house is relatively expensive to build; by comparison, a two-story house with the same exterior dimensions has twice the living area, with essentially no extra cost for roof or foundation. (Roof costs for a one-story house are often minimized by using a low pitched roofline.)
    One-story houses also require a greater amount of lot space in relation to the amount of living area, so they may be inappropriate or impractical on small or narrow lots.
47. One and One-Half Story House
    Also known as a Cape Cod, the ONE AND ONE-HALF STORY HOUSE has a steeply pitched roof that permits part of the attic area to be used for living space. Roof dormers, which add to the amount of usable upstairs space, are a common feature of this type of house. As in the case of one-story houses, the foundation may or may not include a basement. Construction costs per square foot tend to be lower for one and one-half story houses than for one-story houses.
    One and one-half story houses are often built with expandability in mind. Because the ground floor normally has at least one bedroom (and sometimes two), the upstairs level can be left unfinished until the extra space is needed. However, ease of expandability will depend on the quality of the original design and construction, which should allow for adequate access (stairs), ventilation (windows) and plumbing (bathrooms) on the attic level.
48. Two-Story House
    Compared to a one-story or one and one-half story house, the two-story house is more economical in terms of construction cost per square foot of living space.
    The reason for the economy is that square footage can be doubled without doubling foundation and roof system costs. This design also allows for the most living space on a given size of lot. Bedrooms are normally located on the upper floor, providing a natural separation between the public and private areas of the house.
    A concern with all multi-level houses is the design and efficiency of heating and cooling systems. Because heat rises, a poorly designed system will make it difficult to keep the lower level warm in winter, and the upstairs cool in the summer.
    With a well designed system, however, heating and cooling efficiency may actually be greater than for single-story houses, since the building has less exterior surface area relative to the amount of heated or cooled interior space.
49. Split-Level House
    A SPLIT-LEVEL HOUSE has three or four different levels, which are staggered so that each level is separated from the next by half of a flight of stairs. Bedrooms and baths are located
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    on the top level. Half a flight down are the main entry, living room, dining room and kitchen. Down another half-story, beneath the bedroom level, is space for a family room, den or spare bedroom; the garage is often located on this level as well. A fourth level, equivalent to a basement, may be located below the living/dining/kitchen space.
    The design of a split-level home lends itself to a sloped lot, where the garage and main entry can both open out at grade level. On a flat site, the main entry will be raised one- half story above the finished grade.
    A split-level house has some of the same benefits as a two-story house in terms of construction, cost efficiency and natural separation of the various functional areas of the home.
50. Bi-Level House
    A BI-LEVEL or SPLIT-ENTRY HOUSE has two main levels, one atop the other, with an entry or foyer located on a level halfway between. The lower level is sunk about halfway below ground, so the entry is even with the grade level. This design is sometimes called a “raised ranch,” since it is essentially a one-story home with a finished basement that has been raised partially out of the ground. The main rooms of the house are all on the upper level, with the lower story used for a family room or rec room, and perhaps a spare bedroom.
    Since the lower level of a split-entry house is partly below ground, special care must be taken to provide adequate insulation and moisture proofing. Another drawback to this design is the lack of a basement or crawlspace in which to run pipes and ductwork.
    Nevertheless, split-entry homes are cost-effective to build, and the finished lower level space is considered part of the “gross living area” for appraisal purposes in many parts of the country.
    II. Architectural Styles
    ARCHITECTURAL STYLE is the character of a building’s form and ornamentation.
    If homebuyers in a particular area do not find a particular architectural style desirable, homes of that style are likely to sell for less than similar size homes having architectural styles which are more desirable within that community.
    Architectural styles have traditionally been influenced by local factors such as climate and the availability of different building materials.
    There are many examples of traditional architectural styles that are adapted to a particular location: Spanish style houses with thick adobe walls and tile roofs in the southwest desert, Southern Colonial houses with deep shaded porches in the hot, humid South, or Cape Cod style homes designed for protection from cold northern winds in New England (see Figure 7-3).
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    Figure 7-3
    Examples of Different Architectural Styles
    Colonial Cape Cod (1) Cape Cod (2)
    Cottage Victorian Mediterranean
    Southern
    Saltbox
    Ranch
    Chalet “A” Frame Contemporary
    Illustrations courtesy of Marshall & Swift
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    Local traditional styles can still be found in many areas, but location is much less of an influence on architectural style than it used to be.
    Builders are no longer limited to using local materials, since modern transportation systems make different building materials widely available at reasonable costs. The invention of central heating and cooling, as well as improved insulating materials, has broadened the range of architectural styles that can be adapted to local climates.
    A. COMPATIBILITY
    COMPATIBILITY means that a building is in harmony with its use or uses and its environment. In terms of value, one type or style of house is not inherently better or worse than any other. What is most important to value is the compatibility of the design. Compatibility has several different aspects. To maximize value, the design of a house should be compatible with the designs of other homes in the area, with the physical and environmental characteristics of the building site, with the materials used in the construction, and with the preferences of the local market.
    First of all, the design of a house should be compatible with the styles of other houses in the local neighborhood.
    The market may welcome a limited degree of uniqueness in design, but value will generally suffer if the design contrasts too radically with surrounding houses.
    Subdivision developers often impose design restrictions on their developments, because they know that compatibility of design will have a positive impact on property values in the subdivision.
    Case/Example: A contemporary style house located in a neighborhood of other contemporary style houses is likely to be viewed positively by the market. But the same house located in a neighborhood of traditional style homes might seem “out-of-place,” and its value could suffer as a result.
    Compatibility of design also refers to the suitability of the design for the particular building lot and location. Value is enhanced by a design that takes advantage of physical site characteristics, such as views. The design should also be appropriate for the topography of the site. For example, split-level designs often work well on hilly sites, while colonial style houses do not. Finally, the design should be appropriate for the local climate. A design that is specifically adapted to a hot desert climate, for example, would be inappropriate in an area with cool, rainy weather.
    A building’s architectural style is often defined at least in part by the materials used in its construction. Spanish style homes have clay tile roofs, Tudor’s utilize timber framing, contemporary designs incorporate large areas of glass. A compatible design is one where the materials are appropriate to the style.
    Case/Example: A clay tile roof on a Cape Cod house would look ridiculous to most potential homebuyers.
    The final aspect of design compatibility is perhaps the most important: the design must be compatible with the demands of the market.
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    The popularity of any given design is influenced by the economic and social forces that affect value. As lifestyles and demographics change, so does the demand for different design features in housing.
    Ultimately, it is the local market that determines what is a “good” design, and what is a
    “bad” one.
    Case/Example: A development of new contemporary style houses is built in an older community with mostly traditional style housing. If the market places an emphasis on the historic character of the community, the contemporary homes will be viewed as incompatible, and their value will suffer. On the other hand, if market forces are creating a demand for more modern housing in the community, the contemporary homes may not be incompatible at all, but may simply represent a new trend in community standards.
    III. Elements of House Design
    An appraiser must be able to identify the various elements of house design and evaluate any defects in those elements. The elements of house design include siting, interior functional zones, and room characteristics.
    He or she may use mobile apps to reproduce accurate renderings to use for comparison purposes.
    A. SITING
    SITING refers to the placement of the house on the building lot. Placement is normally limited to some extent by building code set-back requirements, which call for minimum distances between the house and the property’s boundaries. Topographic considerations such as slopes or poor soil conditions may also limit where the house may be placed on the lot. Within these limits, however, careful placement of the house on the lot can have a significant impact on value.
    There are four basic considerations in designing the placement of a house on its lot: orientation to the sun, orientation to prevailing storm winds, orientation to views, and the division of the lot into functional zones (see Figure 7-4).
    Appraisers can create figures like the one above by using appropriate mobile apps.
    Orientation to the sun affects the amount of light and heat that can enter the house. In most areas, a design where the living areas of the house face south is considered optimum. This orientation takes best advantage of natural lighting in the most used areas of the home, and helps maximize solar heat gain in the winter. Excessive summer heat gain can be avoided by using wide roof overhangs, which shade the house in summer when the sun is high in the sky, but allow light and heat to penetrate in the winter when the sun’s path is lower.
    Screening with deciduous trees is another effective way to block the summer sun but still allow it to shine through in the winter when the trees are bare.
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    Figure 7-4
    Exterior Functional Zone Example - Windbreak Layout
    Cold Winter Wind
    7 P.M. Sun
    (low)
    4 P.M. Sun
    (high)
    Morning
    Sun
    Cooling Summer Breeze
    Noon Sun
    (high)
    In some areas, orientation to prevailing storm winds is an important siting consideration. In areas that are subject to frequent or heavy storms from a particular direction, it is best to minimize the amount of window area that is directly exposed to the winds, in order to cut down on heat loss. Entries should also be sheltered from the direct path of the storms.
    An attractive view can add significantly to the value of a house. Views should be visible from the most used areas of the house. Even if the site does not have an attractive territorial view, careful landscaping can provide a pleasant view of the lot from the living area.
    The last aspect of house siting is the division of the lot into functional areas or zones, the so-called public, private, and service zones. The area that can be viewed from the street frontage is the public zone. Areas shielded from the street by the house, or by fencing or other landscaping, constitute the private area. The service area includes access ways (driveway, walkways, etc.) and outdoor storage areas. Good design maximizes the amount of private area available for household activities.
    B. INTERIOR FUNCTIONAL ZONE
    An appraiser cannot underestimate the importance of FUNCTIONAL UTILITY, which concerns a building’s ability to perform the function for which it is intended according to current
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    market tastes and standards; as well as the efficiency of use in terms of architectural style, design and layout, traffic patterns, and the size and type of rooms.
    A well-designed house should provide space for three basic activities: living, working, and sleeping.
    Ideally, the spaces provided for each of these activities should be separated, so that one activity does not interfere with another. For example, bedrooms should be located where they will not be disturbed by activities in the living and working areas of the house.
    Figure 7-5 shows how the spaces for the three different activities can be separated into zones. The LIVING ZONE includes the public areas of the house: the living room, dining room, family room and guest bath. The WORKING ZONE is comprised of the kitchen and laundry/ utility room. Bedrooms and private baths are located in the SLEEPING ZONE.
    Figure 7-5 Interior Functional Zones
    LIVING ZONE
    Family
    Room
    Living
    Room
    Master
    Bedroom
    Fireplace
    Ba.
    Ba.
    WORKING ZONE
    Kitchen
    Laundry Ba.
    Dining
    Area
    Ent.
    Bedroom Bedroom
    SLEEPING ZONE
    Garage
    (Appraisers can create similar figures by using floorplan apps online.)
    The separate activity areas of the home are connected by hallways, stairs and entry ways, which are sometimes referred to as a fourth zone of the house, the CIRCULATION ZONE. While the three activity zones should be designed to provide separation of the activities, they should also allow for easy circulation between and within zones.
    Design features that affect desirability affect value because value is determined by supply and demand features of the marketplace.
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    A house’s value is affected by the building’s FLOOR PLAN, which is an architectural drawing indicating the exact layout of rooms and illustrating the functional or nonfunctional relationship between them. Structures with wasted space might lack space where it is otherwise desired so that the property will be less desirable to buyers than similar size homes.
    How the designer allocates space affects desirability for many buyers. An example is while a custom 3,000 square foot home might have only two bedrooms because that is what the original owner wanted, to most potential buyers, the design would be a negative feature.
    Case/Example: In a retirement oriented community, a two-story home without a bedroom on the first level is likely to be far less desirable than one with this feature.
    C. ROOM CHARACTERISTICS
51. Kitchens
    The kitchen is commonly the most used room of the house, so its design and location have a large impact on the functionality of the overall floor plan.
    Kitchens should be conveniently accessible from both the main entrance and service entrance of the house, and should be located adjacent to the dining room and family room, if these rooms are included in the design. Also, the kitchen should be designed so that it is not necessary to walk through the working area in order to reach other rooms of the house.
    A critical aspect of kitchen design is the work triangle, which is formed by the sink, refrigerator, and range. The distances between the three points of the work triangle can make the difference between an efficient kitchen design and a poor one. If the distances are too small, the kitchen will be cramped; if they are too great, preparing a meal will seem like a five-mile hike. A distance of four to seven feet between each point of the work triangle is considered optimal (see Figure 7-6).
    Figure 7-6 Kitchen Work Triangle
    SINK
    REFRIGERATOR
    STOVE
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    Kitchen sizes vary considerably. Eighty square feet of space (8’ x 10’) is considered a minimum, but kitchens twice that size are not uncommon. Larger kitchens often include an eating area or family activity area. The design should include adequate counter and cabinet space, and plenty of electrical outlets for kitchen appliances.
    Lighting and ventilation are important considerations in kitchen design. Overhead lights should illuminate all areas of the kitchen, and a vent or fan should be located over the cooking area to allow cooking fumes to escape. Natural lighting is desirable, but the placement of windows can be a problem. The best location for a kitchen window is over the sink. Additional windows are desirable so long as they do not take up space needed for wall cabinets.
    Windows should never be placed over the cooking area.
52. Laundry/Utility Rooms
    Laundry areas are best located where they are convenient to the sleeping area of the house, off the bedroom hallway for example. However, location of the laundry area is not as critical as most other rooms of the house, and laundries are often located in the garage or basement.
    The laundry area should be well-ventilated, and located where noise from the appliances will not disturb others.
53. Living Rooms
    The living room is the main public room of the house.
    It should be located near the main (guest) entry, be separated from the sleeping area, and preferably be on the south side of the house. If the house has a dining room, it should be next to the living room. It should not be necessary to cross through the living room in order to reach the kitchen or bedrooms.
    The size and shape of the living room should allow for easy arrangement of furniture. About 200 square feet is the minimum size, and rectangular shaped rooms tend to work best for furniture placement. The modern trend is for smaller living rooms, particularly in homes with a separate family/recreation room.
54. Family Rooms
    In many areas, the FAMILY ROOM (also called a recreation room) has taken over the role of the living room as the main center of entertainment and socializing in the house. As part of the living zone, the family room should be separated from the sleeping zone; however, it is usually considered an advantage if the family room is next to (or near) the kitchen.
    Since the family room is a center of activity for household members, direct access to the outside is also an asset.
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55. Dining Rooms
    Dining rooms may be formal or informal. A formal dining room or area is a separate room that is designed for that purpose. Informal dining areas are usually attached to or part of the kitchen itself, and may take the form of a nook or alcove.
    The main considerations for the dining area are that it should be large enough to accommodate a dining table and chairs (including room to get in and out of the table), and it should have easy access to the kitchen so that food does not have to be carried through other areas of the house.
56. Bedrooms
    The number of bedrooms has a major effect on house value.
    Normally, homes with different numbers of bedrooms appeal to different segments of the market, that is, to families of different sizes or lifestyles. The average household size in the market will have a large impact on the desirability of three- or four-bedroom homes, as opposed to two-bedroom homes.
    Ideally, bedrooms should all be located in a separate sleeping zone, to provide both privacy and noise insulation. The most common arrangement is to locate the bedrooms on a separate story or wing. Each bedroom should have convenient access to a bathroom, either directly or via a private hallway. Also, it should not be necessary to go through a bedroom to reach another room (other than a private bath).
    Depending on the room layout, a size of 9’ x 10’ is the minimum needed to allow for a single bed, 10’ x 12’ for a double bed. Whether larger room sizes will add to value depends on local market preferences. Most homes have at least one bedroom that is larger than the others, the MASTER BEDROOM. Modern master bedrooms will often have walk-in closets and other amenities.
    Each bedroom should have its own closet, and enough electrical outlets and lighting fixtures to accommodate bedroom activities.
57. Bathrooms
    The minimum number of bathrooms will depend on the size and type of house, as well as the preferences of the market. In some areas, a three-bedroom house will have two bathrooms.
    Bathrooms should be located where they can be easily accessed from the bedrooms and living areas of the house. A bathroom should not open directly into the living room or kitchen. Master bedrooms often have their own private bath (master bath).
    Bathrooms are used for personal hygiene and sanitation, so ventilation is very important. All bathrooms should have a window or ventilation fan to remove moisture and odors.
    To minimize moisture damage to walls, floors, and ceilings, these surfaces should be made of water-resistant materials, and the plumbing should be of the highest quality. Floor coverings in bathrooms are usually ceramic tile, vinyl, or seamless epoxy.
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    A full bath must include a tub, shower, toilet, and sink. ¾ baths have a toilet, shower, and sink, and ½ baths only have a toilet and sink.
    IV. Construction Methods and Materials
    An appraiser needs to understand the basic materials and techniques used in residential construction in order to adequately describe and analyze the properties being appraised.
    A. FOUNDATIONS
    The FOUNDATION is the base of the structure. It transfers the weight of the building to the ground, and anchors the building against wind and earthquake forces. In the absence of a solid foundation, the building is likely to settle or shift out of position over time, creating major structural problems.
58. Types of Foundations
    The main types of foundations are slab-on-grade, full basement, and crawlspace foundations (see Figure 7-7).
    Figure 7-7 Types of Foundations
    Slab on Grade Basement
    Pier & Beam Crawl Space
    Illustrations courtesy of Marshall & Swift
    Slab-on-grade foundations are concrete slabs that rest directly on the ground.
    Slab foundations are relatively inexpensive to build, especially in areas where foundations do not have to extend below the frost line. (The “frost line” is the maximum depth that the ground freezes in the winter.)
    In areas where the ground freezes, foundations must extend below the frost line to prevent the shifting caused by freezing and thawing. Slab foundations are difficult to heat and cool in hot or cold climates, and there is usually little or no space available for running plumbing or ductwork under the building.
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    To avoid problems from settling and cracking, most slab foundations must be reinforced, and they must be constructed on firm, stable ground. In areas with expansive clay soils, which swell when wet and shrink when dry, slab foundations are not always suitable.
    Some older homes in California and other earthquake prone areas have monolithic slabs or floating foundations. The slabs were only three or four inches thick, not reinforced, and not tied to any footing. They provided no structural support to the building, and cracked easily due to seismic forces.
    Full basements are rooms located below the first floor, at least partially below ground level, and primarily not used for living accommodations. In many parts of the country, full basements are the most common type of foundation. A house with a full basement has several advantages. First, basements are relatively easy and inexpensive to construct in areas where foundations must be built below the frost line to begin with. Second, the basement area makes a good location for utilities, such as the water heater and furnace, and often can be used for storage. Third, the basement space is available for remodeling into extra living space.
    Unless there are proper interior walls that are load-bearing, the appraiser cannot include the basement in the home's gross square footage.
    Unless there are windows and/or other amenities to make it comfortable, this may not be possible. If basement is to be considered part of the home's gross living area, the appraiser should be certain that the basement area meets code requirements for ceiling height, emergency egress and climate control.
    Crawlspace foundations are similar to full basements, except the space between the ground and the first floor is not tall enough to be usable, usually only 18 to 36 inches. This type of foundation is often referred to as a PIER AND BEAM Foundation.
    Crawlspaces are sometimes useful for housing utilities or running plumbing and ductwork, but for the most part they serve simply as a buffer between the building and the ground. Without a crawlspace, moisture from the ground could cause damage to the underside of the flooring in the first floor rooms. Also, a crawlspace that is properly ventilated can help insulate the floor from cold weather.
    In areas prone to flooding, the piers must be strong enough to resist or redirect the floodwaters, and all utilities must be anchored well enough to prevent their being carried away by the currents.
    A variation of the crawlspace foundation is the unventilated crawlspace. If the crawlspace is insulated and sealed, it will function to raise the ground temperature surrounding the foundation. This can make the building more energy efficient.
    Also, the unventilated crawlspace will prevent moisture from seeping into the house, and will cut down on the chance of radon gas seeping in from the ground.
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59. Foundation Materials
    Virtually all modern foundations are constructed of reinforced concrete.
    In areas where stone is readily available, older homes may have stone foundations. The most important parts of a concrete foundation are the FOOTING, which is a perimeter base that distributes the weight of the building to the soil; and the FOUNDATION WALL, which rests on the footing and supports the framing of the building (see Figure 7-8).
    The footings are always below the frost line. Concrete block is an acceptable material for foundation walls, but the blocks must be properly installed and reinforced, and they must be protected from moisture penetration.
    Figure 7-8 Footing and Foundation Wall
    B. FRAMING AND SHEATHING
    FRAMING is the skeleton of the building, including the floors, walls and roof. SHEATHING is the covering that is applied to the framing to provide a base for exterior or interior finishes.
    The lumber that is used for framing is typically softwood lumber (pine, fir, spruce, etc.).
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60. Framing Lumber
    Framing lumber is cut into dimension lumber, also known as yard lumber.
    Dimension lumber is sold in standard sizes. Lumber sizes are stated as nominal dimensions (the approximate size of the lumber when it is cut from the tree). The actual dimensions are smaller than the nominal dimensions, due to shrinkage that occurs as the lumber dries, and also due to the milling process. A nominal “two-by-four” (written as 2 x 4), for example, actually measures about 1 ½ inches thick and 3 ½ inches wide.
    The actual dimensions of dimension lumber must be taken into account when designing a structure. It is also important to remember that dimensions (thickness, width, and length) are usually stated in terms of inches, with lengths of 10’ or more stated in terms of feet.
    Lumber sizes are identified using different terms and standards in different regions.
    For example, the term “four by four” may not refer to a square post. In some areas of the west, where most lumber is milled, this phrase is sometimes used to refer to a 4 x 4 that is actually ripped in half into two two-by-fours.
    The standards for lumber grading are established by national lumber associations. Grades indicate lumber strength and appearance. Common lumber grades include “select” grades, for high quality lumber with few defects; and “common” grades, for construction lumber. The lowest grades (such as “shop”) are for lumber that will be cut apart into smaller pieces for use in non-structural applications, or for lumber that will be used as firewood.
    Lumber grades are determined by visual inspection.
    The inspectors look for imperfections, such as knots and grain deviations, which can weaken the lumber. Structural integrity is important because the size of the spans that can be covered with the wood is usually determined by these integrity factors.
    If a builder wishes to build a home that has large, wide open spaces, he may have to use manufactured I-joists, or Parallel Strand Lumber (PSL).
    Engineered I-JOISTS have several advantages over dimension lumber for floor and roof applications, including strength, uniformity and stability. The greater STRENGTH of i-joists allows them to span greater distances than dimension lumber, which may reduce construction costs, and which allows for greater flexibility in the placement of interior walls. Also, because they are manufactured under carefully controlled conditions, I-joists tend to be more uniform than ordinary dimension lumber, and are less likely to shrink, warp, or twist.
    An increasing number of new homes are being constructed with sustainable or renewable resources. Resources that either take a short time to replenish or do not deplete natural resources can be considered sustainable.
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    Many builders and homeowners are incorporating these methods into their construction and remodeling projects:
    * Bamboo flooring and plywood: Bamboo is a fast growing renewable resource that takes less than 10 years to mature.
    * Forest Stewardship Council (FSC) lumber: Lumber is harvested under strict guidelines for sustaining natural resources.
    * Recycled plastic lumber: Plastic is reformed into lumber and used in decking, fencing, and trim.
    * Engineered lumber: Wood scraps, and other waste, are pressure treated to construct strong, long lasting beams and joists.
    * Straw bale and cob construction: Straw and clay materials are used to create natural homes that conserve energy and require little, if any, traditional heating and cooling systems.
    * Renewable Linoleum: Linseed oil, pine resins, and wood flour create linoleum that can be used as a flooring material.
    * Natural wool and recycled cotton: Sustainable materials that are used for insulation and sound control.
    With the ever increasing concern for the environment, mobile technology is providing access to more resources in this area every day.
    The appraiser will be called upon to determine which of these methods and materials may enhance the value of a particular subject property.
    Also, these types of lumber materials are usually kiln dried to a low moisture content, to help prevent warping and twisting after installation. (Kiln drying also helps kill insects and mold that may infest the wood.) Dry lumber is much less likely to warp, shrink or twist, and it is also less likely to become infested with insects. For these reasons, dry lumber is always specified in local building codes.
    Lumber is treated with chemicals to reduce its susceptibility to fire, insects, and moisture. Framing lumber that comes in direct contact with the foundation must be treated to be resistant to insects and decay. Also, pressure-treated lumber must be used for any portion of a structure that may be exposed to the weather.
    Plywood comes in a variety of grades and types. The grade of plywood indicates its structural integrity; the type specifies its suitability for use in wet environments. Interior grades are suitable for interior applications where the wood is not exposed to moisture or high humidity. Exterior grades are designed for use in exterior applications or in other locations where they will be exposed to moisture.
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61. Framing Terminology
    The essential parts of a framed structure include the SILL, JOISTS, STUDS, and RAFTERS (see Figure 7-9). The sill is the lowest framing member, resting directly on the foundation wall. Floor joists rest on the sill and provide the support for the floor. Studs are vertical framing members that form the walls. Rafters support the roof.
    Figure 7-9
    Framing Terminology
    Illustration courtesy of Marshall & Swift
    The sill is anchored to the foundation with bolts or steel straps. The wood used for the sill must be treated to resist insects and decay. Sills are often doubled. This reduces the chance of racking, an effect that will occur should there be a tremor. Joists and rafters are horizontal framing members that support the floor and ceiling. Studs are vertical framing members that form the walls.
    Door jambs or window jambs form the side and head of a window or door.
    3.