The neighborhood section gives market information about your neighborhood or market area as defined by the appraiser. A neighborhood can be defined by many different factors depending on its location. It could be defined as the area where all the properties in similar subdivisions have the same marketability and appeal to typical buyers. It could also be clustered around a thriving commercial district.
The identification of your neighborhood is of most importance because this is the area where all or most of the comparable sales will be chosen. According to the Georgia Real Estate Appraisers Board, Standards for Developing and Reporting an Appraisal, the market area for residential property is presumed to be “first within the same subdivision as the subject and second located within one mile of the subject.” As such, you may notice in your appraisal report that all comparable sales are located within one radial mile from your property. The one-mile rule is not set in stone. Exceptions to the rule apply and will be used at the appraiser’s professional discretion with proper supporting data and an explanation in the report.
According to the Uniform Standards of Professional Appraisal Practice (USPAP), 2014-2015, when developing a market value opinion, the appraiser must analyze how the use of the property and the value of the property are effected by:
- land use regulations such as zoning and deed restrictions;
- probable changes in the land use regulations;
- economic supply and demand; and
- market area trends.