A cyclic real property appraisal is a legal requirement in the USA. The central government has very less to do with the process. In America, real property appraisal is undertaken by every county's respective appraisal district and is overseen by assessors.
Property values are affected by a number of qualitative and quantitative factors. This ranges from the property, ownership, size, location, use, physical characteristics, sales price, rents, costs, and operating expenses among other things.
Individual analyses and appraisals of properties are not practical for ad valorem tax purposes. While each property is unique, the need for a property value system that offers uniformity, accuracy, effectiveness, cost and time efficiency, but also mass use capabilities, led to the development of mass appraisals.
Mass appraisal is the process of valuing a group of properties as of a given date and using common data, standardized methods, and statistical testing to determine a market value for assessment purposes. It is the systematic assessment of the value of a set of homogenous properties, on a given date, by using standardized procedures.
Computer Assisted Mass Appraisal systems (CAMAs) or automated valuation models are automated systems used for information management related to properties, valuations, owners’ notifications and the security of taxation credibility through uniform valuation procedures. CAMAs are used to streamline the usage of limited resources and complete the valuation process in time. Further, automated valuation models achieve objectivity and uniformity, especially when the number of properties is large.
Automated mass appraisals techniques should satisfy a two-fold need:
Computer programs apply market-derived land rates depending on neighborhood and property type, building costs and depreciation factors calibrated to local market conditions using sales data, building style, grade of construction, and building condition.
Relevant land, improvement and location features are required for Computer Assisted Mass Appraisal generation. CAMA systems also store and process relevant sales, cost, and income and expense data.
Cadastral maps (also known as assessment maps, tax maps, parcel boundary maps, and property ownership maps) covering the entire jurisdiction with a unique identification number for each parcel must be maintained with up-to-date, accurate data. The maps are useful when Geographic Information Systems (GIS) are used by assessors.
GIS displays sale prices, assessed values, inspection dates, work assignments, land uses in addition to high-level analysis of nearby sales, neighborhoods, and market trends.
Property characteristics are essential for classification, valuation, and other purposes. The collected data is based on:
Sale data is required for several approaches used to determine mass appraisals. It helps develop land values, market-based depreciation schedules, and in the derivation of capitalization rates or discount rates to be used in various methods.
This data is to be mandatorily collected for income-producing property. Qualified appraisers are also required to review this data to ensure their accuracy and usability for valuation analysis.
Current cost and depreciation data adjusted to the local market are required. Current cost is the cost of replacing a structure with one of equal utility, using current materials, design, and building standards. It must also include the cost of individual construction components and building items in order to adjust for features that differ from base specifications. Land value and accrued depreciation must be based on non-cost data and can involve considerable subjectivity. Often, land values are extracted from sales of improved property. Depreciation schedules can be extracted from sales data in several ways.
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