In reviewing an appraisal, consistency throughout the report is important. What must be considered if excess land is identified equaling 50% of the total site area?

When excess land is identified as constituting a significant portion of the total site area, it is critical to consider that excess land in all approaches used in the appraisal process. This is because excess land can substantially influence the value of the property and the feasibility of development or investment.

In the Cost Approach, the value of excess land must be factored into the overall property value, as it provides potential for additional development or uses that can enhance the overall return on investment.

In the Sales Comparison Approach, comparables might be selected that either include or exclude comparable excess land. Therefore, when making adjustments to those sales, an appraiser must acknowledge the existence of excess land and how it affects the value derived from comparable sales.

In the Income Approach, if the property includes excess land, the potential for generating additional rental income or future sales can impact the capitalization rate, illustrating its importance in revenue projections.

Each of these approaches has a unique methodology, but the existence of excess land necessitates a consistent consideration throughout. Therefore, recognizing the role of excess land crosses all valuation methods, reinforcing the importance of coherent appraisal standards and methodologies across the report.