USPAP 2018-2019 Edition
© The Appraisal Foundation
(c) When an income approach is necessary for credible assignment results, an appraiser must:
analyze such comparable data as are available to estimate the market income of the property;
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 income and expenses on reasonably clear and appropriate evidence.
Comment: An appraiser must, in developing income and expense statements and cash flow
projections, weigh historical information and trends, current supply and demand factors affecting such
trends, and competition.
(d) When developing an opinion of the value of a lease, leased, or encumbered property, an appraiser must
analyze the effect on value, if any, of the terms and conditions of the lease(s) or encumbrances.
(e) When appraising multiple objects, the appraiser must consider the significance of the value of the
individual assets to the assignment results. Those objects which are more significant to the assignment
results should be the focus of the analysis and analyzed in appropriate detail.
Comment: A group of objects may have a mix of high and low value items. Those objects that are more
significant to the assignment results should be subject to a greater and appropriate depth of analysis.
(f) When analyzing the assemblage of the various 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 component parts.
Comment: Although the value of the whole may be equal to the sum of the separate parts, it also may
be greater than or less than the sum of such 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.
(g) When analyzing anticipated modifications to the subject property, an appraiser must analyze the effect
on value, if any, of such modifications to the extent they are reflected in market actions.
(h) When real property or intangible items are included in the appraisal, the appraiser must analyze the
effect on value of such non-personal property items.
Comment: When the scope of work includes an appraisal of real property or intangible items, competency in
real property appraisal (see STANDARD 1) or business appraisal (see STANDARD 9) is required. In addition,
competency in other types of personal property outside of the appraiser’s specialty area may be necessary
(see STANDARD 7 and the COMPETENCY RULE).
STANDARDS RULE 7-5
When necessary for credible assignment results, an appraiser must, if such information is available to the
appraiser in the normal course of business:
all agreements of sale, validated offers or third-party offers to sell, options, and listings of the
subject property current as of the effective date of the appraisal if warranted by the intended use of the
75 See Advisory Opinion 24,
Normal Course of Business