Valuators will adequately plan the valuation assignment. Their managers will supervise the staff involved in the valuation process. Quality planning is a continual process throughout the valuation assignment.

In developing a valuation conclusion, valuators should define the assignment and determine the scope of work necessary by identifying the following:

The interest to be valued at a minimum includes:

In developing a conclusion, valuators should obtain the relevant information necessary to accomplish the assignment, including:

A complete description and location of the property includes:

In developing a valuation conclusion, valuators should analyze the relevant information necessary to accomplish the assignment.

Determine the Highest and Best Use of the property as vacant and as improved.

Approach to Value --- The Valuation Process. The valuator should determine which methodologies are to be utilized in developing the opinion of value of the subject property. The valuator should consider the appropriate valuation approaches, such as the market approach, the income approach and the cost approach. Professional judgment should be used to select the approach(es) ultimately used and the method(s) within such approach(es) that best indicate the value of the property.

In the Market or Sales Comparison Approach, properties similar to the subject properties sold close to the valuation date are compared to the subject property. Adjustments are made for financing, condition of sale, date of sale, physical characteristics and location to indicate the value of the subject. Care should be taken to consider the number of sales available, their relative comparability, the degree and rationale for adjustments to the sales and the relative correlation and reliability of the value indications from the sales.

In the Cost Approach, an estimated reproduction or replacement cost of the improvements is computed and then reduced for physical, economic and functional depreciation. This value should be computed as of the date of valuation. To this result, an amount is added for the value of the underlying land. This approach is generally useful for specialty properties where other approaches lack sufficient supporting data and where land value and depreciation amounts are reasonably determinable.

In the Income Approach, an income stream is projected based on analysis of historical financial income and expense statements, vacancy rates, rent rolls and terms of existing leases. Value is derived by converting net income/cash flow projections to present value using an applicable capitalization technique reflective of typical investors for the type of property in question. Care should be taken to justify and support projections of income and expenses including any unusual or non-recurring items. Adjustments to income and expense data should be made as necessary to reflect the appropriate income streams consistent with the valuation methodology selected. All discount/capitalization rates should be justified with reliable market data, industry surveys or market supported technical methodology and computations.

The reconciliation and final opinion of value should consider the appropriateness of each approach to the value of the specific property, the quantity, veracity and reliability of the data supporting each approach and should logically lead the reader to the final opinion of value. If a particular approach is not utilized or ignored the valuator should explain the reasons for doing so. Large differences between conclusions from different approaches should be explained.

As appropriate for the assignment, and if not considered in the process of determining and weighing the indications of value provided by other procedures, the valuator should separately consider the following factors in reaching a final conclusion of value:

The valuator should clearly explain and provide reasoning for the value conclusion.

Workpapers must document the steps taken and techniques used and provide the evidence to support the facts and conclusions in the final report.

Valuators will maintain a detailed case activity record (Form 9984, Examining Officer's Activity Record) which:

The case activity record, along with the supporting workpapers, should justify time spent is commensurate with work performed.

In reviewing a real property valuation, and reporting the results of that review, a valuator should form an opinion as the adequacy and appropriateness of the report being reviewed, and must clearly disclose the scope of work of the review process undertaken.

In reviewing a real property valuation, a valuator should:

In the event of a disagreement with the report’s factual representations, underlying assumptions, methodology or conclusions, a valuator should conduct additional fact-finding, research and/or analyses necessary to arrive at an appropriate value for the property.

The objective is to resolve the issue as early in the examination as possible. Credible and compelling work by the valuator will facilitate resolution of issues without litigation.

The valuator will work in concert with the internal customer and taxpayer to attempt to resolve all outstanding issues.

Once the valuator has all the information to be considered in resolving the issue, the valuator will use his/her professional judgment in considering this information to arrive at a conclusion.

Valuators may not have all of the information they would like to have to definitively resolve an issue. Valuators, therefore, should decide when substantially enough information is available to make a proper determination.

Valuators will employ independent and objective judgment in reaching conclusions and will decide all matters on their merits, free from bias, advocacy and conflicts of interest.

The primary objective of a valuation report is to provide convincing and compelling support for the conclusions reached.

Valuation reports should contain all the information necessary to allow a clear understanding of the valuation analyses and demonstrate how the conclusions were reached.

The extent and content of the report prepared depends on the needs of each case.

Valuation reports should clearly communicate the results and identify the information relied upon in the valuation process. The valuation report should effectively communicate the methodology and reasoning, as well as identify the supporting documentation.

Subject to the type of report being written, valuation reports should generally contain sufficient information relating to the items in Identifying, Documenting, and Analyzing above, to ensure consistency and quality.

Reports written with respect to Reviewing above shall contain, at a minimum, information relating to those items necessary to support the revised assumptions, analyses and/or conclusions of the valuator.

Each written valuation report should contain a signed statement that is similar in content to the following

To the best of my knowledge and belief: