USE OF THE LOCATION CLASS METHOD WHEN APPRAISING ITEMS OF REAL ESTATE OF DIFFERENT SIZES

The document relates to appraising methodology of immovable property in comparison with realized sales of similar items. The problem is the conversion calculation when having land of different size area range and various sizes of usable areas of the buildings. Various options were investigated, and it appears appropriate to apply the location class method, which is used to determine percentage price portion of the buildings and lands vs. the total price of the entire real estate. Using the method a significantly lower variance of the resulting values is achieved. All required formulas with explanations are provided. In the end the method is applied in a detailed algorithm calculation and demonstrated on a specific example.