USPAP 2018-2019 Edition
© The Appraisal Foundation
analyze such comparable operating expense data as are available to estimate the operating
expenses of the property;
(iii) analyze such comparable data as are available to estimate rates of capitalization and/or rates of
(iv) base projections of future rent and/or income potential and expenses on reasonably clear and
Comment: In developing income and expense statements and cash flow projections, an appraiser must
weigh historical information and trends, current supply and demand factors affecting such trends, and
anticipated events such as competition from developments under construction.
(d) When developing an opinion of the value of a leased fee estate or a leasehold estate, an appraiser must
analyze the effect on value, if any, of the terms and conditions of the lease(s).
(e) When analyzing the assemblage of the various estates or component parts of a property, an appraiser
must analyze the effect on value, if any, of the assemblage. An appraiser must refrain from valuing the
whole solely by adding together the individual values of the various estates or component parts.
Comment: Although the value of the whole may be equal to the sum of the separate estates or parts, it also
may be greater than or less than the sum of such estates or parts. Therefore, the value of the whole must be
tested by reference to appropriate data and supported by an appropriate analysis of such data.
A similar procedure must be followed when the value of the whole has been established and the appraiser
seeks to value a part. The value of any such part must be tested by reference to appropriate data and
supported by an appropriate analysis of such data.
(f) When analyzing anticipated public or private improvements, located on or off the site, an appraiser must
analyze the effect on value, if any, of such anticipated improvements to the extent they are reflected in
(g) When personal property, trade fixtures, or intangible items are included in the appraisal, the appraiser
must analyze the effect on value of such non-real property items.
Comment: When the scope of work includes an appraisal of personal property, trade fixtures or intangible
items, competency in personal property appraisal (see STANDARD 7) or business appraisal (see STANDARD
9) is required.
STANDARDS RULE 1-5
When the value opinion to be developed is market value, an appraiser must, if such information is available to
the appraiser in the normal course of business:
(a) analyze all agreements of sale, options, and listings of the subject property current as of the effective
date of the appraisal; and
(b) analyze all sales of the subject property that occurred within the three (3) years prior to the effective date
of the appraisal.
Comment: See the Comments to Standards Rules 2-2(a)(viii) and 2-2(b)(viii) for corresponding reporting
requirements relating to the availability and relevance of information.
24 See Advisory Opinion 33,
Discounted Cash Flow Analysis
25 See Advisory Opinion 17,
Appraisals of Real Property with Proposed Improvements.
26 See Advisory Opinion 24,
Normal Course of Business
27 See Advisory Opinion 1,
and Advisory Opinion 4,
Standards Rule 1-5(b)