Module10 - Outline

Module10 - Outline - Module 10 Appraising Special...

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Module 10 Appraising Special Ownerships and Interests Objectives This chapter introduces three specialized topics that you may present to your appraisal students: 17.1 Condominiums and Other Specialized Housing 17.2 Valuation of Partial Interests 17.3 Valuation for Eminent Domain 18.1 The Appraiser’s Background 18.2 State License and Certification Requirements 18.3 Appraisal Groups 18.4 Standards of Professional Appraisal Practice 18.5 Appraising as an Occupation 17.1 CONDOMINIUMS AND OTHER SPECIALIZED HOUSING A variety of housing styles and ownerships will be discussed in this section. Varying the Type of Ownership The housing types examined here offer unique types of title and ownership . Condominiums 1. Form of ownership a. Includes a fee ownership, usually of the dwelling unit airspace, along with an undivided interest in land and the common areas. b. Ownership of parking, recreation facilities, etc. is shared. c. Even the structural walls are owned in common. d. The legal description usually is a three-dimensional outline of airspace. 2. Restrictive features a. CC&Rs establish agreements that are binding upon each owner. b. Authority rests in a homeowners’ association which: 1) Runs the project and sets association dues 2) Maintains exterior walls and common areas 3) Adopts rules and regulations 3. Appraisal considerations a. Emphasis must focus on the sales comparison approach. b. What to compare: 1) Market acceptance at the location 2) The size, condition, and quality of the subject unit 3) Quality and condition of recreation facilities, parking, and other common area amenities 4) Homeowners associations, considering: a) Level of monthly or annual assessments b) Adequacy of the budget c) Competence of management d) Relationships between the association and its members Planned Unit Developments 1. Design and ownership
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a. Feature some common or shared ownerships. b. PUD is a zoning concept that became popular in the late 1960s. c. Allows flexibility in lot size, density, and variety. d. Many PUD projects have townhouse styling. 2. Appraisal problems of townhouses and planned unit developments a. How to handle recreation facilities, common areas, and land value when the cost approach is needed or required. b. Determining the relative efficiency of homeowners’ associations. c. Shortage of comparable sales. 3. Possible solutions in applying the cost approach a. Allocate a proportionate part of the cost of common area improvements to the unit under appraisal. b. Allocate land value as a percentage of the unit or project value. 4. Possible solutions, sales comparison approach a. Use sales from within the same project when possible. b. Sales from nearby projects may not be comparable. Cooperatives
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This note was uploaded on 09/17/2011 for the course CGS 3300 taught by Professor Kaleem during the Spring '08 term at FIU.

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Module10 - Outline - Module 10 Appraising Special...

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