The extraction method is more precise, because it calculates the value of the improvements. It s important to understand that the value of land per square foot tends to decrease as parcel sizes becomes larger. Land value per square foot tends to be higher for small parcels and lower for large parcels. Therefore, it s important to compare lots, which are similar in size. When comparing parcels of dissimilar size, appraisers often use some kind of graphic or statistical analysis.
Modern computers make it relatively easy to convert spreadsheets into graphs.
The Improvements Based on the theory of highest and best use, buildings and other improvements only have value according to how they contribute to the value of the land. An old worn-out building may even detract from the value of the land because it costs money to tear it down and haul it away. Buildings, like everything else, eventually wear out. Some parts of a building wear out faster than other parts. A concrete foundation might last for a century or more, the roof covering might keep out the rain for twenty years, and carpets might have to be replaced every five years.