Opinion ID: 2185407
Heading Depth: 1
Heading Rank: 2

Heading: Market or Sales Approach:

Text: Under the market or sales approach, fair market value of the subject property is estimated by comparing it to similar property which has recently been sold in the area in arm's length transactions. ARSD 64:03:01:02.02 (1989). Hansen listed four comparable sales which occurred between 1986 and 1988. Hansen concluded one provided the best comparison. [5] That property was the Costello property which Hansen appraised at $13.35 per square foot. Sessions testified the Costello property was not an appropriate comparison because the consideration given in exchange for the property consisted partly of a trade for land in Minnehaha County. In order to use the Costello property for comparison, Sessions testified it would be necessary to appraise the property in Minnehaha County. See 29 Am.Jur.2d Evidence § 400 (1967) (allowing evidence of value of property traded for subject property amounts to pyramiding of approximations). Sessions also noted the Costello property was in worse condition. Hansen's opinion as to the fair market value of the subject property was $1,086,000. Sessions used two comparable sales, both of which occurred in December 1986. Sessions valued the first comparable at $21.26 per square foot and the second comparable at $25.81 per square foot. Sessions concluded $20.00 per square foot would accurately reflect the valuation of the subject property. Based on comparable sales, Sessions concluded the subject property had a value of $1,508,660. Associates specifically asserts Sessions should have utilized the acquisition price of the property indicated by Boeckermann's dealings with the former owners wherein Boeckermann agreed to assume their debt, indicating a valuation amount of $1,093,243. The trial court found the sale to Boeckermann was not a valid comparable sale. I agree. In such sales, owners sell to get out of debt. Thus, they may be hard pressed for funds. 29 Am.Jur.2d, supra, § 398. Even Boeckermann agreed it is unusual to have a contract for deed written for 100% of the price of the property. I cannot say the trial court was clearly erroneous in agreeing with Sessions on that point. Sessions testified that, in determining whether a sale was a valid comparable, she went by date of sale, similarity of construction, and similarity of location. Sessions' valuation comports with accepted methods of property valuation for tax purposes. 72 Am.Jur.2d, supra, § 781. [6] Moreover, she did not rely on this assessment, but instead relied on the costs approach which in turn was supported by her comparable sales valuation.