When reliable market data are available with respect to a
given real property, the preferred method of valuation is by reference to sales
prices. In using sales prices of the appraisal subject or of comparable
properties to value a property, the assessor shall:
(a) Convert a noncash sale price to its cash
equivalent by estimating the value in cash of any tangible or intangible
property other than cash which the seller accepted in full or partial payment
for the subject property and adding it to the cash portion of the sale price
and by deducting from the nominal sale price any amount which the seller paid
in lieu of interest to a lender who supplied the grantee with part or all of
the purchase money.
(b) When
appraising an unencumbered-fee interest, (1) convert the sale price of a
property encumbered with a debt to which the property remained subject to its
unencumbered-fee price equivalent by adding to the sale price of the seller's
equity the price for which it is estimated that such debt could have been sold
under value-indicative conditions at the time the sale price was negotiated and
(2) convert the sale price of a property encumbered with a lease to which the
property remained subject to its unencumbered-fee price equivalent by deducting
from the sale price of the seller's equity the amount by which it is estimated
that the lease enhanced that price or adding to the price of the seller's
equity the amount by which it is estimated that the lease depressed that
price.
(c) Convert a sale to the
valuation date of the subject property by adjusting it for any change in price
level of this type of property that has occurred between the time the sale
price was negotiated and the valuation date of the subject property.
(d) Make such allowances as he deems
appropriate for differences between a comparable property at the time of sale
and the subject property on the valuation date, in physical attributes of the
properties, location of the properties, legally enforceable restrictions on the
properties' use, and the income and amenities which the properties are expected
to produce. When the appraisal subject is land and the comparable property is
land of smaller dimensions, and it is assumed that the subject property would
be divided into comparable smaller parcels by a purchaser, the assessor shall
allow for the cost of subdivision, for the area required for streets and
alleys, for selling expenses, for normal profit, and for interest charges
during the period over which it is anticipated that the smaller properties will
be marketed.
