1. Schedule of Market Values (SMV)
• Provides the matrix and other
parameters used in the appraisal and
assessment of real properties
• Lists of locations setting out the base
unit values.
• Shows various influences to value.
• Shows the current market value of
properties.

2. APPRAISAL OF LANDS
The concept of highest and best use. The
PVS defines highest and best use as “The
most probable use of a property which is
Physically possible
Appropriately justified
Legally permissible
Financially feasible, and
which results in the highest value of the
property being valued”

3. Development of SMV
for Residential Lands
(and Commercial and
Industrial Lands)

4. APPRAISAL OF LANDS
1. Establish Benchmark Lot Values
• Typical parcel that serves as the model
• Possess characteristics common to the
majority of properties
• Ready reference against which to check
sales or values of other properties

5. APPRAISAL OF LANDS
2. Random Selection of Parcels
1. Simple Random Sampling
• Lottery – needs complete listing of properties.
Easy for small populations but relatively
complicated and time- consuming for large
populations.
• Generation of Random Numbers/digits – better
and more efficient method for selecting a simple
random sample. Computers and even calculators
can be used to generate random digits, however
a complete listing the properties is needed in
this type of random selection.

6. 2. Systematic Sampling – samples are randomly chosen
following certain rules set by the researchers. This
involves choosing the Kth number of the properties, with
k=N/n, but there should be a random start.
Example: Choose a sample size of 10 from a sub-market
area of 500 properties, using a systematic random
sampling., N=500;n=1
Step 1. Determine k (period/interval) ; 500/10= 50, using
systematic random sampling.
Step 2. Put the random start at 15.
Step 3. Include in the samples of the following: 15, 65,
115, 265, 315,365, 415 and 465.
APPRAISAL OF LANDS

7. 3. Stratified Random Sampling.
• Use Strata (Kind, Classification)
4. Cluster Sampling
• Sub-Market Areas
APPRAISAL OF LANDS

8. Cases in the Development of SMV
1. Sales/Direct Comparison Approach
2. Adjustments for Time.
3. Income Capitalization Approach
4. Land Residual Technique

9. Case 1.
Development of SMV
Using Sales/Direct
Comparison Approach

10. Case 1. Development of SMV Using Sales/Direct
Comparison Approach
Sub-Market Area 1 = Residential, 850 Land RPUs 5%=42, valid data=32
Manner of selection = Systematic. DETERMINE ADJUSTMENT FACTORS.
Sale MV Area UV Rounded UV
1 864,742 240 3,603 3,600
2 137,430 90 1,527 1,500
3 507,840 184 2,760 2,800
4 224,757 113 1,989 2,000
5 683,250 250 2,733 2,700
6 720,300 210 3,430 3,400
7 642,000 214 3,000 3,000
8 1,497,705 313 4,020 4,000
9 600,000 200 3,000 3,000
10 589,615 193 3,055 3,100
11 550,000 180 3,055 3,100
12 495,000 180 2,750 2,800
13 694,760 220 3,158 3,200
14 672,280 196 3,430 3,400
15 589,854 222 2,657 2,700
16 777,000 222 3,500 3,500
Sale MV Area UV Rounded UV
17 1,587,200 320 4,960 5,000
18 282,285 123 2,295 2,300
19 414,492 156 2,657 2,700
20 401,751 147 2,733 2,700
21 725,000 200 3,625 3,600
22 500,000 200 2,500 2,500
23 620,000 200 3,100 3,100
24 650,548 206 3,158 3,200
25 425,000 170 2,500 2,500
26 666,500 215 3,100 3,100
27 234,500 125 1,876 1,900
28 600,000 180 3,333 3,300
29 599,940 180 3,333 3,300
30 700,000 200 3,500 3,500
31 799,866 222 3,603 3,600
32 1,184,900 289 4,100 4,100

11. Case 1. Development of SMV Using Sales/Direct
Comparison Approach
Identify Base Lot, and uncommon lots:
Sale
Sale
Price
Land
Area
Unit
Value
Description Comment
9 600,000 200 3,300
Flat land, inside lot, no
view or other factor
May establish unit
value
11 550,000 180 3,055
Flat land, inside lot, no
view or other factor
May establish unit
value (Sale 9)
22 500,000 200 2,500
Inside lot, land drops
from road 1.5 meters
17% drop in price
23 620,000 200 3,100
Almost flat land, slightly
slopes down from road
May establish unit
value (Sale 9)
28 600,000 180 3,333
Flat lot, no view, located
on good corner
Corner lot achieved
11% addtl value

12. Case 1. Development of SMV Using Sales/Direct
Comparison Approach
Determine Adjustment Factors:
Using Rounded value of Sales 9, 11 and 23 as
the benchmark lot = P 3,000:
% Adjustment low land
= (UV sale 22-UV sale9)/UV Sale 22 x 100%
= (2,500-3000)/3,000 x 100% = -17%
% Corner Lot
= (UV sale 28-UV sale 9)/UV Sale 28
= (3,333-3000)/3,000 x 100% = +11%

13. Case 1. Development of SMV Using Sales/Direct
Comparison Approach
Sale
Sale
Price
Land
Area
Unit
Value
Description Comment
21 725,000 200 3,625
On higher part of
subdivision, slight slope
from road, and has very
good view.
Higher lot with view
adds 20% value
12 495,000 180 2,750
Flat corner lot but near
to old railway line and
squatters.
Shows reduction in
price 17.5% from
standard corner
price.
30 700,000 200 3,500
Good flat piece of land
on main road
Main road location
indicates 16%
increase over base
price

14. Case 1. Development of SMV Using Sales/Direct
Comparison Approach
Determine Adjustment Factors:
% Adjustment low land
= (3,625-3000)/3,000 x 100% = +20%
% Blighted lot (squatters) with corner influence
= (3,000 x 111%) = 3,333 (with Corner Influence)
= (2,750 – 3,333)/3,333 x 100% = -17.5%
%Effect to Main Road
= (UV sale 30-UVsale 9)/UV Sale 30
= (3,500-3000)/3,000 x 100% = +16%

15. Case 1. Development of SMV Using Sales/Direct
Comparison Approach
Determine Adjustment Factors:
• Base unit value = Php3,000/m2 (Sales
9,11,23.)
• Sloping down = deduct 16% (Sale 22)
• Corner lots = add 11% (Sale 28)
• With a view = add 20% (Sale 21)
• Blighted Status (Squatters) = deduct 17%
(Sale 12)
• Lots along main road – 16% higher (Sale 30)

16. Using all the Sales
Data, formulate the
Schedule of Market
Values

17. Case 1. Development of SMV Using Sales/Direct
Comparison Approach
Sub-Market Area 1 = Residential, 850 Land RPUs 5%=42, valid data=32
Manner of selection = Systematic Sampling.
Sale MV Area UV Rounded UV
1 864,742 240 3,603 3,600
2 137,430 90 1,527 1,500
3 507,840 184 2,760 2,800
4 224,757 113 1,989 2,000
5 683,250 250 2,733 2,700
6 720,300 210 3,430 3,400
7 642,000 214 3,000 3,000
8 1,497,705 313 4,020 4,000
9 600,000 200 3,000 3,000
10 589,615 193 3,055 3,100
11 550,000 180 3,055 3,100
12 495,000 180 2,750 2,800
13 694,760 220 3,158 3,200
14 672,280 196 3,430 3,400
15 589,854 222 2,657 2,700
16 777,000 222 3,500 3,500
Sale MV Area UV Rounded UV
17 1,587,200 320 4,960 5,000
18 282,285 123 2,295 2,300
19 414,492 156 2,657 2,700
20 401,751 147 2,733 2,700
21 725,000 200 3,625 3,600
22 500,000 200 2,500 2,500
23 620,000 200 3,100 3,100
24 650,548 206 3,158 3,200
25 425,000 170 2,500 2,500
26 666,500 215 3,100 3,100
27 234,500 125 1,876 1,900
28 600,000 180 3,333 3,300
29 599,940 180 3,333 3,300
30 700,000 200 3,500 3,500
31 799,866 222 3,603 3,600
32 1,184,900 289 4,100 4,100

18. Case 1. Development of SMV Using Sales/Direct
Comparison Approach
Sub-Market Area 1 = Residential, 850 Land RPUs 5%=42, valid data=32
Manner of selection = Systematic Sampling.
Sale Area UV Rounded UV Int
2 90 1,527 1,500
27 125 1,876 1,900 21%
4 113 1,989 2,000 5%
18 123 2,295 2,300 13%
22 200 2,500 2,500 8%
25 170 2,500 2,500 0%
5 250 2,733 2,700 7%
15 222 2,657 2,700 0%
19 156 2,657 2,700 0%
20 147 2,733 2,700 0%
3 184 2,760 2,800 4%
12 180 2,750 2,800 0%
7 214 3,000 3,000 7%
9 200 3,000 3,000 0%
10 193 3,055 3,100 3%
11 180 3,055 3,100 0%
Sale Area UV Rounded UV Int
23 200 3,100 3,100 0%
26 215 3,100 3,100 0%
13 220 3,158 3,200 3%
24 206 3,158 3,200 0%
28 180 3,333 3,300 3%
29 180 3,333 3,300 0%
6 210 3,430 3,400 3%
14 196 3,430 3,400 0%
16 222 3,500 3,500 3%
30 200 3,500 3,500 0%
1 240 3,603 3,600 3%
21 200 3,625 3,600 0%
31 222 3,603 3,600 0%
8 313 4,020 4,000 10%
32 289 4,100 4,100 2%
17 320 4,960 5,000 18%

19. Case 1. Development of SMV Using Sales/Direct
Comparison Approach
Group the values into ranges with an interval of ± 5%
from midpoint
a. C1 = 1,500 (set MP)
b. B1 = C1 x (100%-5%)
=1,425
c. D1 = C1 x (100%+5%)-1
= 1,574
d. B2 = D1 + 1
= 1,575
e. C2 = B2 x (100%+5%)
= 1,700 (Rnd)
f. D2 = C2 x (100%+5%)-1
= 1784
and so on…
E = number of UV
occurring in the range
A B C D E
Range Low 5% Mid High 5% Freq
1 1,425 1,500 1,574 1
2 1,575 1,700 1,784 0
3 1,785 1,900 1,994 1
4 1,995 2,100 2,204 1
5 2,205 2,300 2,414 1
6 2,415 2,500 2,624 2
7 2,625 2,800 2,939 6
8 2,940 3,100 3,254 8
9 3,255 3,400 3,569 6
10 3,570 3,700 3,884 3
11 3,885 4,100 4,304 2
12 4,305 4,500 4,724 0
13 4,725 5,000 5,249 1

20. Case 1. Development of SMV Using Sales/Direct
Comparison Approach
Limit the set of ranges by collapsing few occurrences.
Range Mid Freq
1 1,500 1
2 1,700 0
3 1,900 1
4 2,100 1
5 2,300 1
6 2,500 2
7 2,800 6
8 3,100 8
9 3,400 6
10 3,700 3
11 4,100 2
12 4,500 0
13 5,000 1
Due to too many ranges, collapse Ranges
1 & 2, 3 to 5 and 11 to 13
To collapse, compute the average of the
mid values then round-off
Range Low Mid High
1 1,425 1,600 1,784
2 1,785 2,100 2,414
3 2,415 2,500 2,624
4 2,625 2,800 2,939
5 2,940 3,100 3,254
6 3,255 3,400 3,569
7 3,570 3,700 3,884
8 3,885 4,500 5,249

21. Case 1. Development of SMV Using Sales/Direct
Comparison Approach
Sub Class MV
R1 4,500
R2 3,700
R3 3,400
R4 3,100
R5 2,800
R6 2,500
R7 2,100
R8 1,600
Sort the ranges from highest to
lowest value.
Label the corresponding sub-
class.
Warning: Care should be taken in collapsing
ranges, the interval between a midpoint
increases thereby inappropriately
overvalue or undervalue properties.

22. Case 1. Development of SMV Using Sales/Direct
Comparison Approach
Criteria for Sub-Classification:
R1 Along main road
Along interior road with view
Relatively flat
….
R2 Along interior roads
No view
Relatively flat
….
R3 ….

23. Case 1. Development of SMV Using Sales/Direct
Comparison Approach
Adjustment Factors:
Corner Influence = +11%
Sunken Lots less than 1.5m = 0% (No
adjustment)
Sunken lots at 1.5m or more = -16%
Blighted Status (presence of squatters) = -17%

24. Case 1. Development of SMV Using Sales/Direct
Comparison Approach
Participants Exercise:
Sale
Sale
Price
Land
Area
Unit
Value
Description Comment
9 405,000 180
Flat lot with road right of
way, no view
May establish unit
value.
10 450,000 200
Flat lot farthest from the
main road slightly
sloping
May establish unit
value
Given two more sales, determine the unit values,
Adjustment factors, criteria for sub-classification and
Make corresponding adjustments to the SMV.

25. Case 3.
Development of SMV
Using Income
Capitalization Approach

26. Case 3. Development of SMV Using Income Capitalization
Approach
Ground Rent – Rent for vacant land.
-lower capitalization rate due to durability of
the lot
Caution over:
Short term Ground Rent – Rent for
convenience
Long term Ground Rent – if has no use for
the immediate future.

27. Given two more sales, determine the unit values,
Adjustment factors, criteria for sub-classification and
Make corresponding adjustments to the SMV.
Case 3. Development of SMV Using Income Capitalization
Approach
1 10m x2om 200 5,000 Flat land, inside lot, no view or other factor
2 9mx20m 180 4,600 Flat land, inside lot, no view or other factor
3 10m x 20m 200 4,500
Inside lot, land drops from road by 1.5
meters (i.e. slopes down)
4 10m x 20m 200 5,000
Almost flat land, sight fall from road (slope
down)
5 9m x 20m 180 5,300 Flat lot, no view, located on good corner.
6 10m x 20m 200 7,500
On higher part of subdivision, has slight
slope (fall) from road, and has very good
view.
7 9m x 20m 180 3,800
Flat corner lot but near to old railway line
and squatters.
8 10m x 20m 200 6,000 Good flat piece of land

28. Formula:
V = I / Cr
Case 3. Development of SMV Using Income Capitalization
Approach
Where:
V = Value
I = Net Income
CR = Capitalization Rate
CR = I / V x 100%

29. Case 3. Development of SMV Using Income Capitalization
Approach
Participants Exercise:
Ppty Area M Value
from TD
Net Annual
Rent
Cap
Rate
Utilization
a b c d e=d/c f
A 657 300,000 96,000 Whole Area
B 200 650,000 60,000 Whole Area
C 287 1,700,000 144,000 Only ½ utilized,
rest idle
D 1,150 400,000 45,000 Plant Propagation
Average Capitalization Rate
Determine valid data, estimate the CR:

30. Specific and General Factors as a basis for Criteria and
Adjustment Factors
Do:
• Match pair and determine their difference.
Example: Similar lots, one with view, the other
without
• Determine common differences that may serve as a
criteria or adjustment factor.
• Minor variation are ignored and individual appraisal is
done for uncommon factors.
Note:
• Adjustment factors are peculiar to a property.
• Criteria affects a number of properties (Sub-
Classification)

31. Case 3. Development of SMV Using Income Capitalization
Approach
Estimate the CR from known valid sales and
rentals.
Sale Area Market
Value
Net Annual
Rent
Capitalization
Rate
a b c d e=d/c
A 400 1,100,000 100,000 9.09%
B 200 650,000 68,000 10.46%
C 230 700,000 65,000 9.29%
D 150 400,000 45,000 11.25%
Average Capitalization Rate 10.02% say 10%

32. Case 3. Development of SMV Using Income Capitalization
Approach
Lot
(a)
Land
Area
(b)
Net
Mo.
Rent
(c)
CR
%
(d)
Market
Value
(e)
UV w/
Inf (f)
Influences
(g)
Adj.
to UV
(Inf)
(h)
Unit
Value
without
influence
(i)
Rnded
Unit
Value
(j)
1 200 5,000 10 600,000 3,000 Flat inside lot, no other
factor
0% 3,000 3,000
2 180 4,600 10 552,000 3,067 Flat, inside lot, no other
factor
0% 3,067 3,000
3 200 4,500 10 540,000 2,700 Inside lot, drops to 1.5m -17% 3,159 3,000
4 200 5,000 10 600,000 3,000 Almost flat, slight slope 0% 3,000 3,000
5 180 5,300 10 636,000 3,533 Flat, no view, good corner. +11% 3,145 3,000
6 200 7,500 10 900,000 4,500 High location, slight slope
very good view
+20% 3,600 3,500
7 180 3,800 10 456,000 2,533 Flat, corner lot, near old
railway line and squatters.
-17% 2,964 3,000
8 200 6,000 10 720,000 3,600 Good flat land on main road. 0% 3,600 3,500
e = (c)12/d f = e/b i = f(100%-h)

33. Schedule of Market Values
Sub Classification Unit Value
R1 3,500
R2 3,000
R3 2,500
Case 3. Development of SMV Using Income Capitalization
Approach

34. Case 3. Development of SMV Using Income Capitalization
Approach
Criteria for Sub-Classification:
R1 Along main road
Along interior road with view
Relatively flat
….
R2 Along interior roads
No view
Relatively flat
….
R3 ….

35. Case 3. Development of SMV Using Income Capitalization
Approach
Adjustment Factors:
Corner Influence = +11%
Sunken Lots less than 1.5m = 0% (No
adjustment)
Sunken lots at 1.5m or more = -16%
Blighted Status (presence of squatters) = -17%

36. Case 3. Development of SMV Using Income Capitalization
Approach
Note:
Where there are no rental data specific only to
the land, identify similar lands with
improvements which rental adheres more to
the land rather than its improvement.
Example:
• Car Wash
• Parking lots
• Display areas

37. Case 4. Development of SMV Using Land
Residential Technique
Given:
Parcel 1
Land Area = 200
Total Building Area (2s)= 180m2
Building Age = New
Selling Price = Php 1.85 million
With Block fences = 60 1m
Paving = 83 m2
Conditions:
Lands are similarly situated.
Buildings are similarly constructed.
Paving = Php 800 / m2
Determine the land unit value of Parcel 1.
Parcel 2
Land Area = 180m2 (9m x 20m)
Unit Value = Php 3,000/m2
Building Age = 5 years old
Depreciation Rate = 5.5%
Total Building Area (2s)= 140m2
Selling Price = Php 1.45 million
With Block fences = Php 1,200/1m

38. Case 4. Development of SMV Using Land Residential Technique
Solution:
Determine land value and building value of Parcel 2.
Land Value = 180m2 x Php 3,000/m2 = Php 540,000
Block Fences = Perimeter x Php 1,200/ 1m = 58 1m x Php 1,200/1m
= Php 69,600 say Php 70,000
Depreciated Building Value = 1,450,000 – 540,000-70,000
= Php 840,000
Building Value New = Php 840,000 / (1.00-.055) = Php 888,889
Building Unit Value = Php 888,889/140m2 = Php 6,350/m2
= Php 6,500/m2

39. Case 4. Development of SMV Using Land Residential Technique
Apply the unit value of building to parcel 1:
Value of Building = 180m2 x Php 6,500/m2
= Php 1,170,000
Value of Fence = 60 1m x Php 1,200/1m = 72,000
Value of Pavement = 83 m2 x Php 800/m2 = Php 66,400
Value of Land (Parcel 1) = 1,850,000 – 1,170,000 – 72,000 – 66,400
= Php 541,600
Unit Value of Land = Php 541,600/200m2 = Php 2,708/m2
= say Php 3,000/m2
By using the same residual technique in extracting the value of other
lands, a schedule of market value could be developed. Again the criteria
are determined by the conditions of the land while the adjustment factors
are de determined by the physical characteristics of land.