Evening star., 1924-10-25
4PPRAISALS OF REAL ESTATE
NOW UPON SCIENTIFIC BASIS
Many Factors Enter Into accurate Valuation OF Land
Or Improved Property, Says Secretary OF
Washington Board

in value of land under these condi-
tionS frequently reaches such a point
that the improvements, no matter
how valuable they may be from an
intrinsic standpoint. are eliminated
from consideration i'll estimating val
ues of the land. In other words, there
is time in such a transition period
when the value of the land reaches
point where il is found profitab bic
to completely destroy the improve
mentS in order to make way Tor new
types of structures suitable for buSl-
ness
Assuming that the lot is improved
to its best advantage, the method en-
ployed by appraisers to determine the
value of an Office building or apart
ment house is rather interesting. The
value of. the land is determined sepa-
rately and is based largely on the
market conditions reelected in bona
fide sales in the immediate or similar
location. The value of the improve
mentS is then determined by process
of calculating the cubical contents or
cubic feet contained in the building.
which sum is multiplied bv basic
factor representing the reproduction
cost per cubic foot less an appropriate
deduction for depreciation or obSoleS-
cence. These two sums added repre-
Sent the value of the property. TAX
| ing the normal rent of the building
and capitalizing the net income at a
given rate appropriate for the type
of building the result will represent
| the value of the investment. These
two methods when accurately used
| usually produce approximately the
same result.
Need af Service Grows.
The need for appraisal service has
incrngSR6 N hp
ade. There have always been ap-
praisals for taxation purposes, usually
conducted by municipal assessors, but
modern business and economic de-
velopment have brought about almost
an unlimited number of uses for the
services of an expert appraiser. The
mortgage loan branch of the real
estate business is perhaps one of the
most active fields for appraisal serv-
ice. No mortgage is placed on real
estate by careful broker or financial
institution without an appraisal. The
appraisal is one of the primary securi-
ties and safeguards back of this form
of investment
The adjustment and distribution of
assets, the readjuStment of capital
assets in business, the dissolution of
partnerships involving the division of
assets and the adjustment of income
and Inheritance tax claims indicate
some of the personal uses for real
estate appraiSals. Condemnation of
land for municipal and state uses the
assessment of benefits and damag geS
for city development and extension,
and the proving of damages in aCci-
dents and other instances also pro-
vidcs work for the appraiser.
Individual appraisers who deter
mine values in many of the above
enumerated instances must substan-
tiate their opinions as experts. Con-
sequently the careful appraiser be-
fore rendering an opinion as to value
not only makes A study of the prob
lem, but places his appraisal in def
mite form and supports it by a written
statement of facts on which his juds-
ment can be checked and his valua-
tion SubStantiated.
Available to Public.
The Development of real estate
boards throughout the country has
introduced a new method of handling
appraiSalS in the various cities of
the country. This method is found
in the organization and operation of
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