A record of characteristics of land and buildings was collected and verified. This included defining neighborhoods within the Town. Factors such as the size of the lot and special features were considered. Also, the dwelling is analyzed by:
- Age
- Condition
- Size
- Style
- Type
- Quality
Information on new construction, additions and remodeling was obtained. Outbuildings such as garages and swimming pools were noted. Other factors that have either a positive or negative impact on value from a buyer's perspective were also considered. Sales were verified and analyzed. A valuation model was created for improvements and land. Values were assigned to building areas and physical depreciation and functional obsolescence were subtracted to reach a net value for the buildings, and then the value of the land was added to reach a market value for the property.
After model values were applied, a field review of each property was conducted. Commercial properties were valued using the income approach to value that takes into consideration market rents, typical expenses and vacancy rates, and capitalization rates based upon what a typical investor in income-producing property would expect for return of, return on and risk involved in particular types of properties. The special use properties and those where there were not enough income or sales data were valued by the cost approach. The approach basically adds the replacement cost less depreciation of the structures on a lot to the land value to arrive at an estimated market value.