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INFORMATION THAT WILL BE ADDED TO THE 4th EDITION Theory of Consistent Use The consistent use theory, requires that in a property in a transitional use, the land and building be valued uniformly or consistently. For instance, a house that is located on a commercial street should be valued as either a residential house or as a commercial structure. The building should not be valued as a residential house and the land as commercial land. How the property should be valued would be determined by its highest and best use. --------------- PUTTING IT TO WORK Especially in the residential market place, buyers buy features. An appraiser, to accurately value a property, must know how much a buyer will pay to obtain a specific feature. The values of these features is determined by what appraisers call matched pair analysis. In matched pair analysis, the appraiser finds two comparables that are identical except for one feature. The difference in the sales prices of the comparables are accounted for by the difference in features. For example a home with 2 baths sold for $190,000 and a home with one bath sold for $182,000. If all the other features are the same, the market is indicating a 2nd bath to be worth $8,000. --------------- |
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