MCCCD Program Description

Residential Sales Comparison and Income Approaches

Course: REA275

First Term: 2007 Summer II

Lecture 2.0 Credit(s) 2.0 Period(s) 2.0 Load
Subject Type: Occupational
Load Formula: S

Description: Basic understanding and knowledge of the residential sales comparison and income approaches to appraisal including valuation principles and procedures applicable to these approaches. Development of market analysis, including the application and use of matched pairs and capitalization rates, and gross rent multipliers. Includes organizing market data and reconciling value indications.

MCCCD Official Course Competencies
1. Describe and apply the Valuation Principles that Affect the Sales Comparisons and Income Capitalization Approaches. (I) 2. Learn and apply comparability tools. (II) 3. Describe, evaluate, and apply elements of comparison. (III) 4. Describe, analyze, and apply adjustment procedure techniques. (IV) 5. Describe and analyze supporting quantitative adjustments. (V) 6. Describe and apply sales comparison valuation. (VI) 7. Evaluate financial analysis. (VII) 8. Describe and apply market evidence analysis techniques. (VIII) 9. Describe and apply reconciliation techniques. (IX) 10. Learn the selection of comparables. (X) 11. Evaluate partial interests. (XI) 12. Collect and verify data. (XII)
MCCCD Official Course Competencies must be coordinated with the content outline so that each major point in the outline serves one or more competencies. MCCCD faculty retains authority in determining the pedagogical approach, methodology, content sequencing, and assessment metrics for student work. Please see individual course syllabi for additional information, including specific course requirements.

MCCCD Official Course Outline
I. Valuation Principles & Procedures A. Sales Comparison Approach B. Income Approach C. The Valuation Process D. Reconciliation of the Approaches E. Principles that Affect the Approaches F. Income Capitalization Approach 1. Introduction to Gross Rent Multipliers (GRMs) 2. Issues in GRM Analysis II. Basic Comparability Concepts A. Numerical Measures of Comparability B. Data and Analysis-Graphic C. Data and Analysis-Units of Comparison III. Elements of Comparison A. Sales Adjustment Analysis B. Adjustment Grid IV. Adjustment Procedures A. Sales Comparison-Paired Data Analysis B. Advanced Paired Data Analysis C. Income and Expense Analysis D. Cost and Depreciation Analysis E. Bracketing the Subject Property F. Buyer Interviews G. Real Property Rights Conveyed H. Financing Terms I. Conditions of Sale J. Expenditures Made Immediately After Purchase K. Market Conditions L. Location M. Site Size N. Site View O. Design P. Quality of Construction Q. Actual Age R. Building Condition S. Above-Grade Room Count. T. Gross Living Area or Gross Building Area U. Basement and Finished Rooms Below Grade V. Functional Utility W. Heating/Cooling System X. Energy-Efficient Items Y. Garage/Carport Z. Porches/Patios/Decks V. Qualitative Analysis A. Relative Comparison Analysis B. Ranking Analysis C. Personal Interviews VI. Sales Comparison Valuation A Single-Unit Property B. Two-Unit Property C. Case Study 1 VII. Financial Analysis A. General Tips for Solving Financial Calculation Problems B. Timeline VIII. Other Market Evidence Analysis Techniques A. USPAP Regulations for Analyzing Market History B. Fannie Mae C. Usefulness of Market History of a Subject Property D. Conducting a Three-Year Analysis E. Calculation of Appreciation Rates IX. Reconciliation A. Introduction to Reconciliation B. Why Reconciliation Is Important C. The Reconciled Value Opinion is Seldom an Average of Data D. Inconsistent Answers E. What to Review F. Rounding G. Re-Evaluation of the Analysis and Report H. Questions to Ask When Reconciling Data I. Emphasize the Best Data J. Gross and Net Adjustments X. Selection of Comparables A. Criteria for Selecting Comparable Areas B. Other Selection Criteria for Comparable Sales/Rentals XI. Partial Interests A. Real Property Ownership B. Easements C. Concurrent Ownership of Real Property D. Lease Interests E. Life Estates F. Physical Interests G. Financial Interests XII. Data Collection and Verification A. Data Collection Sources B. General Data Collection Tips C. Tips for Using the MLS System D. Data Verification

MCCCD Governing Board Approval Date: 6/26/2007

All information published is subject to change without notice. Every effort has been made to ensure the accuracy of information presented, but based on the dynamic nature of the curricular process, course and program information is subject to change in order to reflect the most current information available.