What is the primary function of framing in residential construction?

Chapter Title:

Site Valuation and the Three Approaches to Value

Introduction:

Here's a detailed scientific introduction suitable for your chapter on "Site Valuation and the Three Approaches to Value," designed for your "Mastering Sales Comparison" training course.

Introduction: Site Valuation and the Three Approaches to Value

The estimation of market value is a complex process involving the methodical analysis of various data points and valuation techniques. While the Sales Comparison Approach (SCA) forms the core of this course, a comprehensive understanding of valuation necessitates exploring the integral role of site valuation and its relationship to the three fundamental approaches to value: the Sales Comparison Approach, the Cost Approach, and the Income Approach. This chapter focuses on providing a foundational understanding of site valuation, while the other approaches are covered in detail in chapters 8, 9 and 10.

From a scientific perspective, accurate property valuation relies on the principle of highest and best use, acknowledging that a property's potential earning capacity or utility directly impacts its market value. Site valuation, therefore, becomes a critical component in isolating the economic contribution of the land itself, independent of any existing improvements. This is essential for several reasons:

* Component Valuation:  Both the Cost Approach, and the Building Residual technique within the Income Approach require a segregated estimate of land value. Understanding the scientific underpinnings of site valuation enables appraisers to accurately estimate replacement cost (new) less depreciation in the Cost Approach (Chapter 8).

* Legal Requirements: Appraisals for property tax assessment and condemnation often legally mandate a separate site valuation, making it a necessary compliance factor in specific appraisal assignments, as well as an important component in understanding local jurisdictions in relative market data.

* Comprehensive Valuation:  Beyond these specific applications, site valuation contributes to a more robust and reliable valuation process by providing a benchmark against which the contribution of improvements can be assessed.

This chapter aims to equip participants in "Mastering Sales Comparison" with the conceptual and practical knowledge to:

* Understand Highest and Best Use: Apply the concept of highest and best use to site valuation, recognizing the four criteria (legally permissible, physically possible, economically feasible, and maximally productive) that determine the most valuable use of the land.

* Master Site Valuation Methods:  Explain the applications and steps of applying the Six Methods for Appraising Land (Sales Comparison, Allocation, Extraction, Development, Land Residual, Ground Rent Capitalization).

* Relate to the Sales Comparison Approach: Understand how site valuation, though seemingly independent, is interconnected with the Sales Comparison Approach. By accurately valuing the site, we improve our ability to compare properties on an "apples to apples" basis and refine our adjustment processes for relative comparison analysis, paired data analysis, and adjustments (dollar & percentage).

* Prepare for Advanced Valuation: This chapter establishes the groundwork for future modules, particularly those concerning the Cost and Income Approaches, as mentioned in the course description.

By mastering the principles and methods of site valuation, participants will gain a more holistic understanding of the appraisal process and enhance their skills in applying the Sales Comparison Approach for accurate and defensible property valuations.

Topic:

Site Valuation and the Three Approaches to Value

Body:

4. describe the factors that influence proper siting of a house on its lot,
5. list the three basic activity zones of a house and describe their relationships to each other,
6. describe the characteristics that affect functional utility in the various rooms of a house,
7. identify the characteristics of various building components that can affect value, and
8. understand the technical terminology used to describe residential construction.

       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):

1. one-story,

2. one and one-half story,

3. two-story,

4. split-level, and

5. bi-level (also known as split-entry or raised ranch).

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

1. 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.

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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.

2. 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.

3. 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.

4. 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.

5. 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

1. 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.

2. 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.

3. 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.

4. 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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5. 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.

6. 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.

7. Bathrooms

At least one bathroom should be located near the bedrooms, and at least one should be located in or near the living zone. Bathrooms located off the bedrooms, or in a central hallway, should be conveniently accessible to all bedrooms. A minimum size for bathrooms is 5’ x 8’, but many baths are considerably larger. Master bathrooms, in particular, often feature large stall showers, and even separate tubs and showers.

The number of bathrooms has a major effect on value; however, each bath must be fully functional.

Case/Example: “Three quarter” baths (one that has no tub) or one where the commode has been removed or does not flush to avoid water costs will probably be viewed by the market as dysfunctional.

III. Construction Methods and Materials

It is important for appraisers to understand the basic methods and materials that are used in residential construction. This is because the type and quality of building materials has a great impact on house value.

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A. Foundations

The FOUNDATION of a building provides a level base upon which the rest of the structure can be built.
A foundation also transfers the load of the structure to the ground, and resists such forces as frost heave and settlement. Foundations are normally located below the frost line to prevent the structure from shifting or moving.

1. Types of Foundations

There are four basic types of foundations:

1. Monolithic slab,

2. Perimeter wall foundation with crawl space,

3. Basement, and

4. Pier and beam.

A MONOLITHIC SLAB (or “floating foundation”) is a concrete slab at ground level. It rests on a gravel base, which is used for drainage and to increase the load-bearing capacity of the soil. Monolithic slabs are often used in areas with mild winters, where frost heave is not a consideration. Slab foundations are quick and inexpensive to construct, which makes them very popular for low-cost housing.

A PERIMETER WALL FOUNDATION with CRAWL SPACE is made up of concrete or masonry foundation walls that rest on footings, which are wider concrete bases that distribute the load of the foundation walls to the soil. The foundation walls extend several feet above ground level, to isolate the structure from ground moisture. The space between the ground and the floor system is called a CRAWL SPACE. This space is usually only a few feet in height, and cannot be used for storage, but it does provide access for maintenance and repair of utilities (plumbing, electrical, etc.) that are routed under the floor.

The footings must be located below the frost line.

A BASEMENT foundation is similar to a perimeter wall foundation, except the basement walls extend from the footings all the way to the top of the first-floor framing. Depending on the slope of the lot, part or all of the basement may be located entirely below ground level. The foundation walls serve as the walls of the basement area, which can be used for living and/or storage space. Basement foundations are commonly used in areas where the frost line is several feet below ground level, since they minimize the amount of digging needed to establish the footings below the frost line.

A PIER AND BEAM foundation utilizes piers or posts resting on footings to support beams under the floor system. In this type of construction, there are no foundation walls, and the area beneath the floor is an open crawl space. Because this type of foundation allows for a great deal of flexibility in floor plan design, it is often used for houses built on very steep slopes.

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2. Foundation Materials

The most common materials used in foundation construction are concrete and concrete block.
Monolithic slabs are constructed of poured concrete. Perimeter wall and basement foundations may use poured concrete or concrete block. Piers for pier and beam foundations may be concrete, concrete block, or (in older construction) wood posts.
Concrete mix proportions vary, but typically consist of one part cement, two parts sand, and four parts gravel. The concrete is poured into forms (wood, metal, or cardboard) or concrete block is mortared together with concrete and allowed to cure. Concrete block foundations should be topped with a layer of poured concrete for added strength and resistance to moisture penetration. For all types of foundation construction, reinforcing rods, or rebar, are typically added to the concrete to increase its strength.

B. Framing and Sheathing

FRAMING is the interior skeleton of the house.
It is constructed of dimension lumber or, for some framing members (such as roof trusses), engineered wood products. The purpose of the framing is to support the roof, walls, and floors, and transfer the load to the foundation.
SHEATHING is the use of boards or panels that are fastened to the studs, rafters, or joists to cover exterior walls and roofs of a building.
1. Framing Lumber

The term “DIMENSION LUMBER” refers to lumber that is sold by its nominal rather than its actual dimension (see Figure 7-7). For example, a 2” x 4” actually measures about 1 ½” x 3 ½”. The dimension refers to the size of the lumber before it is dried and surfaced. Dimension lumber is commonly softwood, such as fir, pine, spruce, or hemlock, and is sold in lengths from 8’ to 20’ in 2’ increments.

Engineered wood products are substitutes for dimension lumber in some framing applications. These materials include laminated beams, pressed wood joists, and truss roof systems. Engineered wood products can often be less expensive than equivalent dimension lumber, but their main advantage is that they are stronger, straighter, and more uniform in size and quality.

In addition to dimension lumber, framing lumber comes in three categories: boards, timbers, and composite products.
Boards are dimension lumber with a nominal thickness of less than two inches and may be used for siding, sheathing, paneling, trim, and other applications.
Timbers are at least five inches in nominal dimension and are used to construct post-and-beam framing.

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Figure 7-7

Nominal and Actual Lumber Sizes

Nominal Sizes (inches) Actual Sizes (inches)
1 x 2 3/4 x 1 ½
1 x 3 3/4 x 2 ½
1 x 4 3/4 x 3 ½
1 x 6 3/4 x 5 ½
1 x 8 3/4 x 7 ¼
1 x 10 3/4 x 9 ¼
1 x 12 3/4 x 11 ¼
2 x 2 1 ½ x 1 ½
2 x 3 1 ½ x 2 ½
2 x 4 1 ½ x 3 ½
2 x 6 1 ½ x 5 ½
2 x 8 1 ½ x 7 ¼
2 x 10 1 ½ x 9 ¼
2 x 12 1 ½ x 11 ¼
4 x 4 3 ½ x 3 ½
4 x 6 3 ½ x 5 ½
4 x 8 3 ½ x 7 ¼
4 x 10 3 ½ x 9 ¼
4 x 12 3 ½ x 11 ¼

The “green building” movement has caused the rise in popularity of composite products that include laminated veneer lumber, wood I-joists, glulams, and parallel strand lumber.
The reason is they are stronger than solid wood and use less virgin wood than does conventional lumber.

A RENEWABLE RESOURCE is a product that comes from natural resources that can be recycled and have a quick regrowth such as trees, bamboo, hemp and recycled plastic. GREEN TECHNOLOGY refers to products or processes that are less harmful to the environment than serving the traditional purpose.

BAMBOO FLOORING is used by more builders in an attempt to be “green.”
Since bamboo trees take approximately 25 years to mature and are not truly renewable the most sustainable product are bamboo panels made from bamboo byproducts. This is also true of other natural materials such as cork, hemp and recycled plastic.

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2. Framing Terminology

There are several framing terminology that appraisers should know, including:

1. studs,
2. sills,
3. joists,
4. rafters, and
5. Jamb

STUDS are the vertical framing members of walls. They are normally spaced 16” apart, center to center (16” o.c.), although spacing of 24” o.c. is permitted in some jurisdictions.
Dimension lumber of 2” x 4” is most often used, but 2” x 6” lumber is also used, especially in exterior walls, to allow for more insulation.
SILLS are the horizontal framing members that rest directly on the foundation. They are attached to the foundation with bolts, and provide a nailing surface for the floor system and wall studs.
JOISTS are horizontal framing members used to support a floor or ceiling. Joists are supported by the sills, and also by beams running through the center of the structure. Joists may be constructed of dimension lumber, or of engineered wood products (I-joists).
RAFTERS are the framing members that support a roof. On a GABLE ROOF (a roof that slopes upward on two sides), the rafters run from the exterior wall to the ridge board (the horizontal framing member that forms the peak of the roof). The tops of the rafters are covered by sheathing, which provides a nailing surface for the roofing materials.

JAMB- Is the framework of a door or window.
3. Framing Methods

The four basic methods of framing are balloon framing, platform framing, post-and-beam framing and truss roof systems.

BALLOON FRAMING uses long studs that run continuously from the foundation to the roof, with the second floor joists resting on a ledger board that is attached to the studs. Balloon framing is a strong framing method that is sometimes used for multi-story construction, however, it tends to be labor intensive due to the need to use long studs. Fire safety is also a problem.

PLATFORM FRAMING is a framing method where the floor joists form a platform upon which the wall studs rest. With this method, each story of the building is framed separately. Platform framing is relatively simple, and it is considered more resistant to fire than balloon framing because it allows the inside of walls to be blocked at each floor level. Platform framing is the most common framing method used today.

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POST-AND-BEAM FRAMING consists of heavy vertical timbers (posts) and horizontal timbers (beams) that are joined together with mortise and tenon joints, pegs, or bolts. Post-and-beam framing eliminates the need for studs or load-bearing walls. Because the interior walls do not have to bear a load, the floor plan can be easily changed by moving the walls, or even eliminating them altogether. This construction method often features exterior walls of glass panels.

TRUSS ROOF SYSTEMS make use of prefabricated roof trusses. The roof trusses are designed and assembled in a factory, and shipped to the job site ready to be installed as a unit. Each truss is designed to be extremely strong and rigid, and to distribute the roof load to the exterior walls. Because truss roof systems do not rely on interior walls for support, interior walls can be easily moved or changed.
The two main problems with trusses are that they cannot be altered in any way because they were designed to hold a set amount of weight and they are very susceptible to fire damage if the fire lasts any length of time.

a. Roof Framing

ROOF terminology which appraisers should be familiar with include: DORMER, FENESTRATION, GABLE ROOF and RAFTERS.

DORMERS are projections built out from a sloping roof, allowing for windows in the attic space, and must adhere to strict building codes.
FENESTRATION - The arrangement and proportioning of windows and doors in a building.
In addition to its effect on energy efficiency, the style of roof used on a house can also have a significant impact on the architectural character of the house.

GABLE ROOF A simple Gable Roof involves the placement of two sloping roof surfaces together so that the highest point where they meet forms a ridge. Most of the homes with Gable Roofs have rafters and ceiling joists. Gable Roofs also frequently employ a truss framework.

As previously indicated RAFTERS are the framing members that support a roof.
There are a variety of styles of roofs, including a hip roof, gable roof, flat roof, mansard roof and gambrel roof. Figure 7-8 shows a hip roof, a gable roof, and a mansard roof. The various types of roofs tend to be associated with particular architectural styles.
The choice of roofing material can be just as important as the roof style in defining the architectural character of the building. Common roofing materials include wood shingles, asphalt shingles, slate, clay tile, and concrete tile.

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Figure 7-8

Roofing Examples

Gable Hip Mansard

Illustrations courtesy of Marshall & Swift

Wood shingles give a natural look. Wood is best for homes built in wooded areas or located near water.

Asphalt shingles are the most commonly used roofing material due to their low cost and ease of installation. They can also be combined with fire-retardant additives to provide a high degree of fire protection.

Slate and tile roofs are generally the most expensive type of roofing material, but they also tend to have the longest life and require the least maintenance. They are noncombustible, and can provide distinctive architectural character to a house.

These should all be considered when determining the market value of comparable sales in the Sales Comparison Approach, in the orderly process of appraisal.

b. Chimneys, Stacks, and Vents

CHIMNEYS are primarily masonry and are a vertical structure containing a flue for carrying gaseous products of combustion (smoke) from a building or structure.
STACK-A vertical, brick or metal structure that emits fumes.
VENT- Is a pipe that is used to exhaust gases. They are usually located at the peak of the roof to exhaust attic air to help reduce heat build-up.

4. Sheathing

SHEATHING is a rigid material attached to the outside of the studs or rafters to provide a nailing base for the exterior siding or roofing. Sheathing materials commonly include plywood or oriented strand board (OSB). OSB is an engineered wood product made by layering strands of wood and bonding them together with adhesives.

A moisture barrier should always be placed between the sheathing and the exterior siding, to prevent moisture penetration and retard rot.

C. Exterior Finishes

The most common exterior wall finishes include: wood, masonry, stucco and siding (vinyl, aluminum, steel)
Wood exteriors can be siding, shingles, or logs. Wood siding is installed horizontally with overlapping boards. Shingles and shakes are also applied with overlapping pieces, but tend to give a more rustic look than siding. Log exteriors are found on homes that incorporate log cabin or log home design. These can be very expensive.

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Masonry walls can be brick, stone, or concrete block. Masonry walls are very durable and require very little maintenance.

Stucco, a mixture of cement, sand, and water, is applied over a mesh base. The color of stucco can be varied by mixing pigment into the finish coat. Stucco exteriors are durable, but can be prone to cracking, especially in areas that are subject to earthquakes or soil subsidence.

Siding is any exterior finish that is applied horizontally, with overlapping courses of material. Siding can be made of vinyl, aluminum or steel. These products are relatively inexpensive, long-lasting, and require very little maintenance.

D. Doors and Windows

1. Doors

DOORS are panels of wood, metal, or glass used to close an opening in a wall. Doors are typically classified as

ملخص:

Scientific Summary: "Site Valuation and the Three Approaches to Value"

This summary pertains to a chapter within the training course "Mastering Sales Comparison: From Adjustments to Accurate Valuation," which aims to provide participants with a comprehensive understanding of property valuation through a detailed exploration of the Sales Comparison Approach. The chapter focuses on the critical role of site valuation within the broader context of the three primary approaches to value: Sales Comparison, Cost, and Income.

Main Scientific Points:

• Necessity of Site Valuation: The chapter emphasizes the importance of a separate site valuation, particularly when utilizing the Cost Approach and the building residual technique within the Income Approach. These techniques require an independent estimate of the land's value to accurately derive the overall property value. Furthermore, separate site valuations are legally mandated in some jurisdictions for property tax assessment and condemnation proceedings.

• Three Approaches to Value: After completing data collection, HBU analysis, and site evaluation, the appraiser applies the three approaches to value:

  • Cost Approach: This approach rests on the premise that the value of an improved property is the sum of the site value plus the depreciated cost of the improvements. Accurate site valuation is therefore fundamental, followed by the estimation of replacement cost for existing structures. Then the appraiser estimates the depreciation by estimating the effect on value of separate items, such as physical deterioration of the improvements, or a loss in value due to an out-dated design.

  • Sales Comparison Approach (Market Approach): This approach hinges on identifying comparable properties ("comparables") and adjusting their sales prices to reflect differences compared to the subject property. The formula Subject Value = Comparable Sales Price +/- Adjustments encapsulates this process. It is very rare, however, to find two properties that are so comparable that there is no difference in their values. For this reason, the adjustment process is central to the sales comparison approach.

  • Income Approach: This approach derives value based on the income-generating potential of a property. Residential appraisers typically employ the Gross Rent Multiplier (GRM) method, dividing comparable rental sales prices by their monthly income to determine a multiplier, which is then applied to the subject property's gross monthly income.

• Reconciliation: The chapter highlights the importance of reconciling the value indicators obtained from each of the three approaches. Reconciliation is defined as analyzing the appraisal problem, selecting the most appropriate method of the three, and giving it the most weight in determining the final estimate of value. Reconciliation involves a thorough review of data reliability, analytical logic, and the appropriateness of each approach to the specific appraisal problem. There is no set formula, relying entirely on the judgment and ability of the appraiser to arrive at the most reliable estimate of value.

Conclusions and Implications:

• Comprehensive Valuation: The integration of site valuation within the framework of the three approaches underscores the need for a holistic valuation process. Site value is not merely an isolated figure but a crucial component that significantly influences the outcomes of the Cost and Income Approaches.
• Accuracy in Sales Comparison: By mastering sales comparison, appraisers are able to perform relative analysis, adjustments(dollar & percentage), interpret comparable sales, and confidently reconcile value indicators to arrive at a precise appraisal.
• Informed Decision-Making: A thorough understanding of site valuation and its interplay with the three approaches equips appraisers with the knowledge necessary for defensible and accurate property valuations.

Relevance to Course Description:

This chapter directly aligns with the course's objectives:

• It lays the groundwork for understanding adjustments by establishing the importance of a precise site valuation as a starting point for the Cost Approach.
• It complements the exploration of the Sales Comparison Approach by highlighting the need to compare sites for their intrinsic value before considering improvements.
• It provides context for accurate valuation, as the reconciled value is only as reliable as the individual value indications derived from each approach, including a properly assessed site value.
• The chapter lays the foundation for advanced topics covered in later chapters, such as cost estimation (Chapter 8), sales comparison analysis (Chapter 9), income capitalization (Chapter 10), reconciliation (Chapter 11), and reporting (Chapter 12).