Date of Appraisal: January 1, 2024
FANNIN CENTRAL APPRAISAL DISTRICT | EFFECTIVE DATE OF REPORT: MAY 1, 2024
2024 Mass Appraisal
Report
PREPARED FOR THE ENTITIES AND GENERAL PUBLIC, OF
FANNIN COUNTY, TEXAS
Forward
The Fannin Central Appraisal District has prepared and published this report to
provide our citizens and taxpayers with a better understanding of the District’s
responsibilities and activities. This report has several parts: a general introduction and
then several sections describing the appraisal responsibilities and efforts by the Appraisal
District.
The Appraisal District is responsible for the local property tax appraisal and exemption
administration for twenty-six taxing jurisdictions in Fannin County which include the school
districts of Blue Ridge, Bonham, Dodd City, Ector, Fannindel, Honey Grove, Leonard, North
Lamar, Savoy, Sam Rayburn, Trenton, Whitewright and Wolfe City. Also included are Fannin
County and the cities/towns of Bailey, Bonham, Dodd City, Ector, Honey Grove, Ladonia,
Leonard, Pecan Gap, Ravena, Savoy, Trenton and the town of Windom. Fannin Farms
Municipal Utility District was added for 2024. Where there are shared jurisdictional
boundaries, Fannin Central Appraisal District has established procedures whereby
ownership and property data/information are routinely exchanged. Appraisers from
adjacent Appraisal Districts discuss data collection and valuation issues to minimize the
possibility of differences in property characteristics, legal description, and other
administrative data.
Each taxing unit, such as the county, a city, school district, etc., sets its own tax rate to
generate revenue to pay for such things as police and fire protection, public schools, road
and street maintenance, courts, water and sewer systems and other public services.
Appraisals established by the Appraisal District allocate the year’s tax burden on the basis
of each property’s taxable value January 1
st
. The Appraisal District also determines
eligibility for various types of property tax exemptions, such as those for homeowners, the
elderly, disabled veterans, charitable, and religious organizations.
Table of Contents
Introduction ............................................................................................................................................ 1
Mission Statement .................................................................................................................................. 1
Appraisal District Overview ................................................................................................................... 1
Appraisal District Personnel Resources ............................................................................................ 1
Appraisal Records and Data ........................................................................................................... 2
Mapping ............................................................................................................................................. 2
Information Systems ........................................................................................................................... 2
Taxing Jurisdictions ................................................................................................................................. 3
Scope of Appraisal ................................................................................................................................ 3
Subject of Appraisal Report ............................................................................................................. 3
Legal Requirements ........................................................................................................................... 3
Administrative Requirements............................................................................................................ 3
Definition of Market Value ................................................................................................................ 3
Client and Intended User.................................................................................................................. 4
Purpose and Intended Use ............................................................................................................... 4
Properties Identified .......................................................................................................................... 4
Property Rights Appraised ................................................................................................................ 4
Assumptions and Limiting Conditions .............................................................................................. 4
Date of Appraisal .............................................................................................................................. 5
Date of Report ................................................................................................................................... 5
Documentation for Mass Appraisal ................................................................................................. 5
Value Reporting ................................................................................................................................. 5
Site Inspection .................................................................................................................................... 6
Four C’s ............................................................................................................................................... 6
Locked Gate/Posted No Trespassing .............................................................................................. 6
Use of Mobile Field Devices (IPad) Technology ............................................................................. 6
Reappraisal ........................................................................................................................................ 6
Valuation Process................................................................................................................................... 7
Introduction ........................................................................................................................................ 7
Cost Approach .................................................................................................................................. 7
Sales Comparison Approach ........................................................................................................... 8
Income Approach ............................................................................................................................. 8
Reconciliation .................................................................................................................................... 8
Mass Appraisal Methodology Employed ........................................................................................ 8
Application of Mass Appraisal ......................................................................................................... 8
Performance Testing ......................................................................................................................... 9
Ratio Studies ....................................................................................................................................... 9
MASS APPRAISAL MODEL DEVELOPMENT ............................................................................................ 9
The general steps, in building a mass appraisal model are: ........................................................ 9
Regional, Area and Neighborhood Market Analysis .................................................................... 9
Highest and Best Use Analysis ........................................................................................................ 10
Collection of Data and Verification .............................................................................................. 11
Depreciation: ................................................................................................................................... 12
Developing Tables or Schedules Based on Economic and Appraisal Theory ......................... 12
Calibrating Tables/Schedules Using Adjustments Based on Depreciation, Lease Rates, etc.
................................................................................................................................................................... 12
Applying the Values of the Model to the Properties in the District ............................................ 12
Reviewing the Production of Values for Properties that Fall Outside the Model or Benchmark
Property. ................................................................................................................................................... 12
LAND VALUATION ................................................................................................................................. 13
Introduction ...................................................................................................................................... 13
Land Appraisal/Model Development ........................................................................................... 13
RESIDENTIAL VALUATION ...................................................................................................................... 14
Introduction ...................................................................................................................................... 14
Residential Appraisal Process/Model Development ................................................................... 14
Treatment of Residence Homesteads .......................................................................................... 15
COMMERCIAL/INDUSTRIAL VALUATION ............................................................................................. 16
Commercial-Industrial Appraisal Process/Model Development ............................................... 16
BUSINESS PERSONAL PROPERTY VALUATION ..................................................................................... 19
Introduction ...................................................................................................................................... 19
Business Personal Property Appraisal Process/Model Development ........................................ 19
UTITILITES, INDUSTRIAL PERSONAL PROPERTY ................................................................................. 20
CERTIFICATION ...................................................................................................................................... 21
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Introduction
The Fannin Central Appraisal District is a political subdivision of the state. The jurisdictional
boundary of the Appraisal District covers 899 square miles. The Constitution of the State of Texas,
the Texas Property Tax Code, and The Rules of the Texas comptroller’s Property Tax Assistance
Division govern the operation of the appraisal district.
Mission Statement
The mission of the Fannin Central Appraisal District is to discover, list and appraise property as
accurately, ethically and impartially as possible in order to estimate the market value of all
property within the boundaries of the district for ad valorem tax purposes. The district must make
sure that each property owner is given the same consideration, information, and assistance. This is
accomplished by properly administering the laws under the property tax system and operating
under the standards of:
➢ The Property Tax Assistance Division of the Texas State Comptroller’s Office (PTAD)
➢ The International Association of Assessing Officers (IAAO)
➢ The Uniform Standards of Professional Appraisal Practice (USPAP)
Appraisal District Overview
Appraisal District Personnel Resources
The Chief Appraiser is primarily responsible for overall planning, organizing, staffing, budgeting,
coordinating, and controlling District operations.
The Deputy Chief Appraiser, under the guidance of the Chief Appraiser, supervises the
appraisal department and is responsible for the valuation of all real and personal property
accounts. The property types appraised include commercial, residential, business personal,
mineral, utilities, and industrial.
The District’s appraisers are subject to the provisions of the Property Taxation Professional
Certification Act and must be duly registered with the Texas Department of Licensing and
Regulation (TDLR). Support functions such as records maintenance, release of information,
providing general assistance to property owners, and hearings before the Appraisal Review Board
are coordinated by personnel in support of the Property Tax Code requirements.
The Fannin Central Appraisal District contracts with Thomas Y. Pickett & Co., Inc. to appraise
industrial personal property, industrial real property, utility properties (Category J) and mineral
accounts (Category G).
As outlined in the approved 2024 Appraisal District Budget, the appraisal district staff consists
of 22 employees as depicted in the following organization chart:
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Appraisal Records and Data
Fannin Central Appraisal District is responsible for establishing and maintaining 37,651 real and
personal property parcels covering the entirety of Fannin County plus portions of Collin, Delta,
Grayson, Hunt and Lamar Counties. The data includes property ownership, location, description,
characteristics and exemption information. Property characteristics data is reviewed and updated
as necessary through annual field efforts. New construction is inspected and documented into
appraisal records. Sales are routinely validated during the course of the annual field inspections.
General trends in market data are required through various sources, including internally generated
questionnaires to buyers and sellers.
Mapping
Fannin Central Appraisal District utilizes a digital Geographic Information System (GIS) which is
hosted on the District’s server integrated with the Computer Assisted Mass Appraisal (CAMA)
system and posted on the District’s website at www.fannincad.org. The District’s GIS vendor for
maintenance and updates is BIS Consultants. The GIS is updated on a weekly basis as a matter of
course. GIS corrections and special mapping projects are uploaded within two weeks of
notification. The most recent imagery was flown January of 2021 by EagleView/Pictometry. Users
of our GIS are able to select from five different mapping formats when using the online property
search.
Information Systems
The District uses PACS/PACS Mobile by Harris/True Automation for its CAMA system. The
District’s website, information technology interfaces and property GIS is maintained by BIS
Consultants.
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Taxing Jurisdictions
The Fannin Central Appraisal District is responsible for appraising properties within the county
boundaries. The following jurisdictions fall within that scope:
Fannin County
City of Bailey
City of Bonham
City of Dodd City
City of Ector
City of Honey Grove
City of Ladonia
City of Leonard
City of Pecan Gap
City of Ravenna
City of Savoy
City of Trenton
Town of Windom
City of Whitewright (Split with Grayson
County)
Blue Ridge ISD (Split with Collin County)
Bonham ISD
Dodd City ISD
Ector ISD
Fannindel ISD (Split with Delta County)
Honey Grove ISD
Leonard ISD (Split with Hunt County)
North Lamar ISD (Split with Lamar County)
Savoy ISD
Sam Rayburn ISD
Trenton ISD (Split with Collin County)
Whitewright ISD (Split with Grayson
County)
Wolfe City ISD (Split with Hunt County)
Fannin Farms MUD
Scope of Appraisal
Subject of Appraisal Report
As noted above, the Fannin Central Appraisal District is charged with the appraisal of all real
estate and tangible personal property, unless specifically exempted, within its jurisdiction. More
specifically, the Texas Property Tax Code directs, “except as otherwise provided…all taxable
property is appraised at its full market value as of January 1
st
.” Market Value, as defined below, is
the type of value the Appraisal District seeks to determine.
Legal Requirements
This mass appraisal is made within the provisions of the Texas Property Tax Code (TPTC).
Administrative Requirements
This mass appraisal is conducted in accordance with the reappraisal plan of Fannin Central
Appraisal District for 2023/202 and the methods and procedures described in the appraisal
manuals of the District. Furthermore, the District subscribes to the standards of The Appraisal
Foundation known as the Uniform Standards of Professional Appraisal Practices in accordance
with Sec. 23.01 (b) of the TPTC.
Definition of Market Value
Market value for purposes of this mass appraisal is as defined by the Texas Property Tax Code,
§1.04(7), and is as follows:
“Market value” means the price at which a property would transfer for cash or its
equivalent under prevailing market conditions if:
✓ Exposed for sale in the open market with a reasonable time for the seller to find a
purchaser;
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✓ Both the seller and the purchaser know of all the uses and purposes to which the property
is adapted and for which it is capable of being used and of the enforceable restrictions
on its use; and
✓ Both the seller and purchaser seek to maximize their gains and neither is in a position to
take advantage of the exigencies of the other.
Client and Intended User
The client and intended users of the appraisals performed by the Appraisal District are the
taxing entities that provide services to the citizens of the county.
Purpose and Intended Use
The purpose of the appraisal is to estimate the Market Value of all real and personal property,
falling within the jurisdictional boundaries of Fannin County in an equitable and efficient manner
for ad valorem tax purposes in accordance with the laws of the State of Texas.
Properties Identified
The descriptions of the properties included in this appraisal are included in detail within the
appraisal records of Fannin Central Appraisal District. These descriptions include, but are not
limited to the legal description, situs location, ownership, and detailed listing of the characteristics
of the properties. The property identification is contained on the Appraisal Card, which is
maintained for each parcel account.
Property Rights Appraised
Most properties are appraised in fee simple interest unless otherwise required by the Texas
Property Tax Code. However, restrictions, easements, encumbrances, etc., are considered on an
individual basis. Fractional interests or partial holdings are appraised in fee simple for the total
property and divided proportionately based on the pro-rated interests. Fee Simple estate is
defined by the Dictionary of Real Estate Appraisal 6
th
Ed., (published by the Appraisal Institute),
page 90 as: “An absolute ownership unencumbered by any other interest or estate, subject only
to the limitations imposed by the governmental powers of taxation, eminent domain, police
power, and escheat.” In some properties where existing leases are in place, the Fee Simple
interest is appraised subject to leasehold.
Assumptions and Limiting Conditions
The District has taken reasonable steps to secure adequate funding; however fiscal restraints
do impact the mass appraisal process. Limited resources and personnel are available to perform
the appraisals; therefore, it is not possible to physically inspect every property included on the
appraisal roll every year. Physical inspections are performed at least once every three years.
When physical inspections are conducted on real property, they are generally performed with
exterior review only. It is assumed that the interior conditions are consistent with the exterior
condition. When physical inspections were made for the valuation of personal property,
inspections are made of the entire facility if allowed by the owner or management of the business.
Additional Assumptions and Limiting Conditions:
✓ The appraisals were prepared exclusively for ad valorem tax purposes.
✓ It is assumed that the title to the properties is good and merchantable.
✓ No liability is assumed for matters of a legal nature.
✓ Assumptions made in the report are based on the best knowledge and judgment of the
appraiser and are believed to be typical of the market.
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✓ All properties are appraised as if free and clear of any or all liens or encumbrances, unless
otherwise stated.
✓ Existence of hazardous materials or other adverse environmental conditions are not
considered, unless otherwise indicated.
✓ Any drawings, photographs, plans or plats are assumed to be correct and are included
solely to assist in visualizing the property.
✓ It is assumed that there is full compliance with all applicable federal, state and local
regulations and laws, unless otherwise noted.
✓ No responsibility is assumed for hidden or unapparent conditions in the property that may
affect its value.
✓ It is assumed that all required licenses, certificates of occupancy, consents or other
administrative authority from local, state or federal governments can be obtained or
renewed for any use on which the value estimate contained in this report is based.
✓ A specific survey and analysis of properties to determine compliance with the provisions of
the Americans with Disabilities Act has not been performed and possible non-compliance
has not been considered in valuing these properties.
✓ While it is believed all information included in the appraisal is correct and accurate; the
appraiser does not guarantee such.
✓ Verification of sales transactions are attempted through the following means: questionnaires
to buyer and seller, telephone inquiry, field review or sales data obtained from the
Comptroller and other sales data services.
Hypothetical Considerations
There are no hypothetical considerations considered or used in the development of this
mass appraisal.
Date of Appraisal
As prescribed by the Texas Property Tax Code, the effective date of this appraisal is January
1
st
. In some instances, the date of the appraisal may be different for inventory. The owner of real
property inventory may elect to have the inventory appraisal at its market value as of September
1 of the year preceding the tax year to which the appraisal applies by filing an application with
the Chief Appraiser requesting that the inventory be appraised as of September 1
st
in accordance
with Section 23.12, Texas Property Tax Code.
Date of Report
The date of this 2024 Mass Appraisal Report is May 14, 2024.
Documentation for Mass Appraisal
The documentation for this report is contained in the appraisal records, property cards,
appraisal manuals, sales ratio studies and supporting data maintained by Fannin Central Appraisal
District.
Value Reporting
The final value is reported in the Appraisal Notices that are sent to property owners in April.
However, due to the equalization process, the value is subject to change based on the Appraisal
Review Board’s final ruling.
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Site Inspection
The purpose of the site inspection is to verify the improvements (as defined by Texas Property
Tax Code Section 1.04(3)) on the ground, evaluate the condition of the structures, document any
change in the property from the last site inspection, confirm ownership, special appraisals or
exemption entitlements and address any taxpayer concerns while on site. Diagrams of the
reappraisal areas and appraiser production benchmarks are located in the 2023-2024 Reappraisal
Plan, Appendix A. Per the 2023-2024 Reappraisal Plan, the reappraisal (site inspection areas) for
2024: Savoy ISD, Ector ISD, Whitewright ISD, Trenton ISD, Leonard ISD and Wolfe City ISD area for
2024. The district implemented the systematic site inspection/review of the 10,676 properties in
these areas with a focus on Class, Condition, Configuration and Characteristics of the
improvements.
A total of 10,676 parcels were inspected which accounted for 100 % site inspection rate.
Four C’s
The purpose of the site inspection is to collect site-specific data that will be used in the
analysis phase of reappraising properties. The four C’s are what the appraiser is attempting to
determine or verify. They are: The Classification of the property and the improvements situated
on the property; the Condition of the improvements; the Characteristics of the property and the
improvements and, finally; the Configuration of the property and the improvements situated on
the property. The appraiser must account for all improvements situated on a property regardless
of their contributory value.
Locked Gate/Posted No Trespassing
District appraisers will not attempt to enter properties with visible no trespassing signs or locked
gates. Appraisers will make three attempts to contact property owners with locked gates or
posted no trespassing signs in order to coordinate a date/time with the owner for the appraiser to
gain access to the property. If no response is received from the owner after the second attempt,
a final mailing is sent to the owner informing them of the necessity to utilize other approved
methods (i.e. aerial photography/Unmanned Aerial Vehicle (UAV)) to inspect their property.
Use of Mobile Field Devices (iPad) Technology
The District opted out of the mobile technology in 2018. The technology was not ready for
deployment in our district. However, iPads were utilized for GIS purposes in the field.
Reappraisal
Reappraisal, as opposed to site inspections, is the process of reviewing and analyzing real
estate transactions, comparing findings from site visits, and conducting ratio studies within defined
market areas. Changes are applied to existing improvement schedules land valuation tables
based on the market forces within the market areas. Sales are evaluated to make sure they meet
the definition of a fair market or “Arm’s Length” transaction. The time period considered is the
previous one to two years, depending on activity, for fair market transactions--duress or
foreclosure sales are considered up to three previous years. The impact of the change in the
market on properties in Fannin County is revealed in the form of preliminary value reports to the
taxing units and the Notice of Value submitted to the taxpayers.
Mass adjustments are made to areas adversely impacted by the influence of the foreclosure
sales when supported by data. The impact of the foreclosure market in a given area (ISD,
Neighborhood and Subdivision) is calculated by comparing the foreclosure sale price per sq. ft. to
the arm’s length sale price per sq. ft. and is expressed by a percentile adjustment applied in mass
to the affected area. The percentile adjustment is validated through the ratio study and model
calibration process.
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The District subscribes to and utilizes Marshall and Swift Residential and Commercial Cost
Guides. These cost guides are approved and recognized by the Board of Directors and the Taxing
Units supporting the Appraisal District functions as an authoritative source for basing improvement
values within the county. Cost schedules, building feature additions and reductions, economic
life and depreciation tables are updated to mirror the changes made by the publishers of Marshall
and Swift cost guides annually. Prescriptive local and cost multipliers as of January of the value
year are used to coincide with the January 1
st
date of appraisal prescribed by law. All schedules
and tables used to value properties are updated annually and are developed through ratio
studies for each market area and strata. Timelines for task accomplishment and appraiser
production standards for these processes are included in Appendix B and C respectively.
The District receives listings of all deeds filed for record with the County Clerk at the Fannin
County Courthouse. Deeds are processed by the District’s Deeds and GIS department staff.
Information is scanned in the CAMA software including grantor, grantee, and date of recording,
volume, and page number as recorded in the County Clerk’s records. New Property Identification
Numbers (PID’s) are generated by the CAMA system when a deed splits the property or if the
property is otherwise subdivided by recorded plat. All recorded deeds are processed within 30
days of the date of filing with the County Clerk.
Business personal property is located by site inspection, using data sources such as yellow
pages, sales tax permit holder lists, commercial vehicle listings, renditions and other business listing
publications to ensure that all property owners are located. Renditions are also required of utility
companies, railroads, and pipelines. All businesses are mailed a rendition around January 1 of
each year. Owners are required by state law to list all their business personal property--failure to
render results in an immediate 10% penalty and a possible 50% penalty if fraud is involved in a false
rendition.
Maps have been developed for years that show ownership lines for all real estate. These maps
are stored digitally in the District’s Geographic Information System (GIS) system and can be
viewed by the public on the District’s website at www.fannincad.org. The data and its maintenance
are an ongoing effort of Fannin Central Appraisal District and our contracted GIS vendor.
Valuation Process
Introduction
The valuation process includes the development of well supported, value estimates based on
the analysis of all pertinent general and specific data. There are three (3) district methods of data
analysis; cost, sales comparison and income capitalization. Generally, one or more of these
methods is employed in all estimations of value (all appraisal estimates are made in compliance
with requirements as provided in the Texas Property Tax Code). The use or application of the
different approaches is dependent upon the property type and quality and quantity of data
available. In addition, the procedures of valuing real property, raw land, personal property and
mineral interest vary somewhat from each property type. The following is a brief general
description of the steps or procedures employed in the three (3) approaches and reconciliation of
value:
Cost Approach
This approach is based upon the proposition that an informed purchaser would pay no more
than the cost of producing a substitute property with the same utility as the subject property. In
valuing real property, the subject(s) site is first valued as if vacant by comparing it to the sale of
similar use sites using the Sales Comparison Approach. Then the reproduction of replacement cost
new is estimated for the subject improvements and from this, an amount is deducted for
depreciation from all causes to arrive at value.
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Sales Comparison Approach
This approach is based upon the proposition that an informed purchaser would pay no more
for property that the cost to him of acquiring a similar property with the same utility. In this
approach, similar properties that have recently sold are compared to the subject. Notable
differences in the utilized comparable properties are adjusted to the subject in the process.
Comparisons are made and are typically based upon age, location, size, financing, physical
characteristics and terms of sale. These adjustments are abstracted from and/or otherwise
supported to represent the actions of buyers and sellers in the market. The value range that is
indicated by adjusted sales is correlated or reconciled into a final value estimate.
Income Approach
This is the process in which the anticipated flow of future benefits (dollar income or amenities)
is discounted to a present-day worth figure through a direct capitalization or discount procedure.
All expenses attributable to real estate are deducted from an effective gross income estimate to
arrive at a forecast of applicable net income streams. The net income streams are then
“capitalized” or “discounted” into value.
Reconciliation
Following the development of the applicable approaches to value, the strengths and
weaknesses of each is weighed and measured. The approach or approaches that is/are deemed
most reliable and pertinent is/are given most consideration in the final value indication of the
property. The primary tool used for reconciliation is the appraisal-to-sale ratio study.
Mass Appraisal Methodology Employed
The task of Fannin Central Appraisal District, as noted above, is to appraise for ad valorem tax
purposes, the Market Value of all real estate and personal property within its jurisdiction as of
January 1
st
. Due to the vast number of properties involved, the methodology used by the district is
“Mass Appraisal”. Mass Appraisal is defined under USPAP as “the process of valuing a universe of
properties as of a given date using standard methodology, employing common data and
allowing for statistical testing. It is important to note that the district follows the standards,
practices, procedures, and subscribes to the standards promulgated by the Appraisal foundation
known as the Uniform Standards of Professional Appraisal Practices (USPAP) to the extent that they
are applicable. In cases where the Appraisal District contracts for professional valuation services,
the contract that is entered into by each appraisal firm requires adherence to similar professional
standards.
Application of Mass Appraisal
Mass appraisal methodology employs the use of Mass Appraisal Models, which are
mathematical expressions of how supply and demand factors interact in markets or sub-markets.
These “models”, are developed, by gathering specific information about each property. By using
computer-assisted appraisal programs and recognized mass appraisal methods and techniques,
we then compare that information with data for similar properties and with recent market data.
(Sales prices, lease rates, cost, etc.) Personal property is also valued in a similar fashion, using mass
appraisal techniques and methodology. As part of the mass appraisal methodology, statistical or
performance testing of the results is required. As such, the district uses computer-based quality
control testing and measures the outcome of each appraisal.
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Performance Testing
The primary tool used to measure mass appraisal performance is the ratio study. A ratio
study compares appraised values to market values. In a ratio study, market values (value in
exchange) are typically represented by sales (i.e. a sales ratio study).
Independent, fee appraisals may also be used to represent market values in a ratio study (i.e.
an appraisal ratio study). If there are not enough sales to provide a reliable pool of data,
independent appraisals can be used as indicators for market value. This can be particularly useful
for commercial, warehouse or industrial rent property for which sales are limited. In addition,
appraisal ratio studies can be used for properties that are not appraised, by legal stature, at
market value, but reflect the use-value requirement. An example of this are multi-family housing
projects subject to subsidized rent provisions or other governmental guarantees as provided by
legislative statues (affordable housing) or agricultural lands to be appraised on the basis of
productivity or use value.
Fannin Central Appraisal District has adopted the policies of the International Association of
Assessing Officers (IAAO) STANDARD ON RATIO STUDIES regarding its ratio study standards and
practices
Ratio Studies
Overall sales ratios are generated on selected property types, or more often, in a specific
geographic area (neighborhood) to allow appraisers to review general market trends in their area
of responsibility. In many cases, field checks may be conducted to insure the ratios produced are
accurate and the appraised values utilized are based on accurate property data characteristics.
These ratio studies aid the appraiser by providing an indication of the market activity by economic
area or changing market conditions (appreciation or depreciation). In addition, the Texas
Comptrollers’ Office conducts an overall independent performance test, covering all aspects of
the Appraisal Districts valuation procedures.
MASS APPRAISAL MODEL DEVELOPMENT
The general steps, in building a mass appraisal model are:
• Primary market analysis of the region, areas, and neighborhoods
• Highest and Best Use analysis
• Collecting and verifying data on sales, cost, lease rates, cap rates, etc.
• Developing tables or schedules based on economic and appraisal theory
• Calibrating the tables or schedules using adjustments based on depreciation
lease rates, etc.
• Applying the value of the model to properties in the district
• Reviewing the production of values for properties that fall outside of the
model
Regional, Area and Neighborhood Market Analysis
Data on regional economic forces such as demographic patterns, regional location factors,
employment and income patterns, general trends in real property prices, rents, and interest rate
trends, availability of vacant land, construction trends and costs are collected from private
vendors and public sources which collectively provide the field appraiser a current economic
outlook on the real estate market.
Neighborhood analysis involves the examination of how physical, economic, governmental,
social forces and other influences affect property values. The effects of these forces are also used
to identify, classify and stratify comparable properties into smaller, manageable subsets of the
universe of properties known as neighborhoods or for residential valuation.
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The first step in neighborhood analysis is the identification of a group of properties that share
certain common traits. A “neighborhood” for analysis purposes, is defined as a geographic
grouping of properties where the physical, economic, governmental and social forces are
generally similar and uniform. Once a neighborhood has been identified, the next step is to define
its boundaries. This process is known as “delineation”. Some factors used in neighborhood
delineation include location, sales price range, lot size, age of dwelling, quality of construction
and condition of dwelling, square footage of living area and story height. Delineation can involve
the physical drawing of neighborhood boundary lines on a map, but can also involve statistical
separation of stratification based on attribute analysis. Part of neighborhood analysis is the
consideration of discernible patterns of growth that influence a neighborhood’s individual market.
Few neighborhoods are fixed in character. Each neighborhood may be characterized as being in
a stage of growth, stability or decline. The growth period is a time of development and
construction. As new neighborhoods in a community are developed, they compete with existing
neighborhoods. An added supply of new homes, tend to include population shift from older
homes to newer homes. In the period of stability, or equilibrium, the forces of supply and demand
are about equal. Generally, in the stage of equilibrium, older neighborhoods can be more
desirable due to their facilities. The period of decline reflects diminishing demand or desirability.
During decline, general property use may change from residential to a mix of residential and
commercial uses. Declining neighborhoods may also experience renewal, reorganization
rebuilding, or restoration, which promotes increased demand and economic desirability.
Neighborhood identification and delineation is the cornerstone of the residential valuation
system at the district. All the residential analysis work done in association with the residential
valuation process is neighborhood specific. Neighborhoods are field inspected and delineated,
based on observable aspects of homogeneity. Neighborhood delineation is periodically reviewed
to determine if further neighborhood delineation is warranted. Whereas neighborhoods involve
similar properties in the same location, a neighborhood group is simply defined as similar
neighborhoods in similar locations. Each residential neighborhood is assigned to a neighborhood
group based on observable aspects of homogeneity between neighborhood(s) available market
data by linking comparable properties outside a given neighborhood.
Neighborhood grouping is highly beneficial in areas of limited or no sales.
Highest and Best Use Analysis
Definition
The reasonably probable and legal use of vacant land or an improved property that is
physically possible, appropriately supported, financially feasible, and that results in the highest
value. The four criteria the highest and best use must meet are legal permissibility, physical
possibility, financial feasibility, and maximum productivity. Alternatively, the probable use of land
or improved property – specific with respect to the user and timing of the use – that is adequately
supported and results in the highest present value (The Appraisal of Real Estate, 14th Edition, p.
333, by the Appraisal Institute).
The highest and best use of property is the reasonable and probable use that supports the
highest present value as of date of the appraisal. The highest and best use must be physically
possible, legal, financially feasible, and productive to its maximum. The highest and best use of
improved property is normally its current use (Texas Property Tax Code Section 23.01 (d) provide
exceptions in that market value for a residential homestead shall be determined solely on the
basis of the property’s value as a residence homestead, regardless of highest and best use). This is
due largely to the fact that as long as the structures contribute value to the property, then
removing them for a new use would be detrimental. At some point in time when the value of just
the land, minus demolition, becomes greater than the value of the current use of the property,
then highest and best has changed. This is particularly true in areas of transition, where old
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structures are being torn down for new improvements, or an area of new growth changes land
use from vacant tracts to new development. Determining the highest and best use of the land
and the improved property will dictate how the property is compared to other properties.
Matching similar properties is important in building a value model or schedule.
Collection of Data and Verification
Data collection of property involves maintaining data characteristics of the property within
the appraisal administration software. The information includes site characteristics, such as land
size and topography, and improvement data, such as square foot of living area, year built, quality
of construction and condition. Appraisers use manuals that establish uniform procedures for listing
real property in the appraisal administration software. All properties are coded according to these
manuals and approaches to value are structured and calibrated based on this coding system.
Data collection for personal property is also performed in a similar fashion and maintained in the
appraisal administration software. The type of information maintained on personal property
includes business inventory, furniture and fixture, machinery and equipment, cost and location.
The field appraisers conducting on-site inspections use a personal property manual during their
initial training as a guide to correctly list all personal property that is taxable.
Data collection is performed via a number of different sources or avenues. Resources for the
discovery, describing and listing of property include, but are not limited to the following: new
construction, field inspections by appraisal staff, renditions, deed records, sales tax permits, plat
records and assumed name certificates filed for record with the Fannin County Clerk’s office,
building permits, newspapers and publications, phone books, general correspondence with
owners, local fee appraisers, builders and realtors, newspaper publications, various subscriptions or
services, Multiple Listing Service (MLS), maps and other appraisal records of the District.
The appraisal staff is responsible for collecting and maintaining the property characteristic
data for classification, valuation, and other purposes. Accurate valuation of real and personal
property by any method requires a physical description of personal property or land and building
characteristics. The data collection effort involves the field inspection of real and personal
property accounts; the goal is to periodically field inspect residential property every three years
and personal property/commercial property at least every year. Meeting this goal is dependent
on budgetary constraints for example the number of appraisers is needed to support the appraisal
requirement and the frequency of each re-appraisal period.
Data collection procedures have been established for residential, commercial, and personal
property. Residential, commercial and personal property appraisers work throughout Fannin
County. Appraisers conduct field inspections and record information either on a property record
card, personal property data sheet or a field review device (i.e. iPad/laptop). The appraisal staff is
responsible for their own data entry of the fieldwork directly into the computer file.
Construction costs are gathered from available sources including, but not limited to the
Marshall and Swift Valuation Service and local builders and developers for use in the cost
approach to value.
Information for the sales comparison approach is gathered from properties within the
appraisal district through the mailing of questionnaires to grantors and grantees, utilization of the
local Multiple Listing Service (MLS), and all other available sources deemed reliable. Sales data is
entered into the “Sales Module” of the appraisal database making it available for use by the
appraisal staff. Sales are checked for validity by appraisal or clerical staff.
Rental rates, expenses and occupancy rates are gathered on income producing properties
for use in the income approach to value through questionnaire mailings, owner filed property
reports and telephone surveys.
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Information relating to business personal property is collected during the normal
discovery/inspection process and through owner filed renditions and property reports. Costs are
also researched for personal property using various source documents and guides.
General trends in new construction techniques, construction costs, interest rates and other
pertinent data are gathered from various sources such as trade journals, Marshall and Swift
Valuation Service, university real estate research centers and any other sources deemed
appropriate and reliable.
Property reviews are also compiled on property where information has been solicited and
received from the owner. Mailings sent in mass or at the request of the property owner, frequently
verify the property characteristics or current condition of the property. When the property data is
verified in this manner, field inspections are sometimes required to confirm or verify.
Depreciation:
Depreciation is the loss in value of an improvement or personal property item due to physical
deterioration, functional obsolescence and/or economic obsolescence. Each property, during
the on-site review process, is assigned a depreciation factor based on the observed physical
condition of the property. Additional adjustments may be made to the property for functional or
economic obsolescence if conditions so warrant. Personal property is depreciated using the
Marshall and Swift tables that encompass a remaining life and effective age approach.
Developing Tables or Schedules Based on Economic and Appraisal Theory
Property in the district is valued from schedules, typically using a comparative unit method.
The schedules may be based on building costs, acquisitions costs, sales price per square foot,
lease rate per square foot or some other unit of measure. Depending on the property type, the
unit of comparison may be different; but the unit of measure is established in the market. Land is
typically sold on a per square foot or per acre basis; personal property, is typically based on the
cost to acquire; residences are measured on a price per square foot basis. Commercial property is
sometimes measured on price per square foot basis, but is also measured by the income it
produces. A table establishes the relationship or ratio of price/cost to square foot.
Calibrating Tables/Schedules Using Adjustments Based on Depreciation, Lease Rates, etc.
Because not all property is alike, adjustments need to be made to the mass appraisal model
for differences in location, age, desirability, etc. Stratifying property from good to bad, best to
worst and the different levels in between is necessary for a reliable analysis. In addition, differences
in properties can be quantified for specific items; these items are then adjusted in the analysis to
arrive at a more uniform model.
Applying the Values of the Model to the Properties in the District
After developing the mass appraisal model and adjusting it for the specific property type, and
its different characteristics, the value indicated in the model is applied to the individual properties
in the district. Typically, the valuation of residential property the price per square foot for a
particular property would be applied to its building size (i.e. 1000 SF residence X $100/SF = $100,000
value).
Reviewing the Production of Values for Properties that Fall Outside the Model or
Benchmark Property.
After preliminary estimates of value have been determined in sub-market areas, the appraiser
reviews the computer-assisted values against his/her own appraisal judgment. During this review,
the appraiser is able to physically inspect both sold properties and unsold properties for
comparability and consistency of values.
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LAND VALUATION
Introduction
Appraising the land involves the development of models or value tables, based on the
property type (commercial, residential, industrial, rural, or agricultural). The different uses of
property require a different unit of comparison. In the real estate market, commercial and
industrial land is typically sold on a per square foot basis. Underdeveloped residential land
typically sells on a per square foot or per acre basis, but developed residential lots will sell for
example on a front foot basis, a square foot basis, or a whole unit basis.
As such, the land use or zoning will dictate the valuation table used. In addition, specific land
influences are used where necessary, to adjust parcels outside the neighborhood norm for such
factors as view, size, shape and topography, among others. The appraiser sometimes uses
abstraction and allocation methods to ensure that the land values analyzed best reflect the
contributory market value of the land to the overall property value.
Land Appraisal/Model Development
Similar to other property types, the general steps in the land appraisal process are
development of:
• A primary market analysis of the region, areas, and neighborhoods that influence the
properties that are being appraised. Supply, demand, interest rates, economic outlook,
etc. are taken into consideration.
• A highest and best use analysis is performed for the property to other properties being
appraised, looking at the most profitable use that is legal, physically possible and
economically feasible.
• A collection and verification of data on sales, asking prices, land leases and land cap
rates is made for all areas of Fannin County. This data is incorporated into the value
schedules for the different properties and property types.
• Schedules or tables are then developed, based on economic and appraisal theory,
using data garnered from across the county. The schedules are based on the unit of
comparison that is dictated by the property type.
• Adjustments are made (calibrating) to the tables or schedules based on location,
topography, size, zoning, etc. This makes the analysis more uniform and provides greater
reliability.
• The values of the schedule are then applied to the properties in the district.
• Lastly, a review is made of the values for properties in the district and confirmed by ratio
studies.
The process described above is repeated by the appraiser for each of the different property
types in the district.
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RESIDENTIAL VALUATION
Introduction
Fannin Central Appraisal District is responsible for developing uniform and equal market
values for all residential improved properties.
Residential Appraisal Process/Model Development
Similar to other property types, the general steps in the residential appraisal process are
development of:
1) A primary market analysis of the region, area, and neighborhoods that influence the
properties that are being appraised. Supply, demand, interest rates, economic
outlook, etc. are taken into consideration. Each appraiser analyzes the individual
neighborhood where the properties are located that are the subject of appraisal.
2) A highest and best use analysis is performed for the property or properties being
appraised, looking at the most profitable use that is legal, physically possible and
economically feasible. The highest and best use of residential property is normally its
current use. This is due to the fact that residential development, in many areas,
through use of deed restrictions and zoning, precludes other land uses. Residential
valuation undertakes reassessment of highest and best use in transition areas and
areas of mixed residential and commercial use.
3) In areas of mixed residential and commercial use, the appraiser reviews properties in
these areas on a periodic basis to determine, if changes in the real estate market
requires reassessment of the highest and best use of a select population of
properties.
4) A collection and verification of data on sales, asking prices, house leases and gross
rent multipliers is made for all areas of the county if data is available. This data is
incorporated into value schedules for the different properties and property types.
Appraisers drive entire neighborhoods to review the accuracy of the existing
improvement data and identify changes to the real estate.
5) Schedules or tables are then developed, based on economic and appraisal theory,
using the data garnered from across the county. The schedules are developed using
the unit of comparison that is dictated by the property type. Residential properties
(improved) in the district are valued from cost and sales schedules using a
comparative unit method, typically on price per square foot. The districts residential
cost schedules have been customized to fit the local residential and labor market.
The cost schedules are reviewed regularly and used largely to support the market
approach. A sales file for the storage sales data is also maintained. Residential
vacant land sales, along with commercial improved and vacant land sales are
maintained in the sales data files. Residential improved sales are collected from a
variety of sources, including: district questionnaires sent to buyers, field discovery,
protest hearings, various sales, vendors, builders and realtors. A system of type,
source, validity and verification codes was established to define salient facts related
to a property’s purchase or transfer.
6) The appraiser reviews every neighborhood annually, using sales ratio study/analysis.
The first phase involves neighborhood ratio studies that compare the recent sales
prices of neighborhood properties to the appraised values of the sold properties. This
set of ratio studies affords the appraiser an excellent means of judging the present
level of appraised value and uniformity of the sales. The appraiser based on the sales
ratio statistics and designated parameters for valuation of data, makes a preliminary
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decision as to whether the level of market value in a neighborhood needs to be
updated in an upcoming reappraisal, or whether the level of market value in a
neighborhood is at an acceptable level. The residential appraiser performs statistical
analysis to evaluate whether value or equity is consistent. This analysis for each
neighborhood is developed from the verified sales whenever enough sales for a said
neighborhood exists that reflect a sample of the total properties within said
neighborhood. Each verified sale contains the following characteristics: class, square
footage of living area, year built, number of baths, condition, and garage, if any. The
price per square foot along with the sales amount, and date of sale are also listed in
the analysis. This analysis is referred to as the square foot analysis. The schedule or
table is then calibrated. The statistical analysis along with the judgment of the
appraiser establishes the opinion of value for the properties. After appraisal fieldwork
and entering of data, a second ratio/analysis study is conducted to evaluate the
new appraised values in relationship to the sales price as set out in the original sales
analysis.
7) Lastly, a review is made of the values for properties that fall outside of the schedule.
Once the market adjusted value factors are applied, a review or quality control study
is made that compares recent sales prices with the proposed values.
Treatment of Residence Homesteads
Beginning in 1998, the State of Texas implemented a constitutional classification scheme
concerning the appraisal of residential property that receives a residential homestead exemption.
Under the new law, beginning the second year a property receives a homestead exemption
increases in value of that property are “capped”.
The value for tax purposes (appraised value) of a qualified residence will be the LESSOR of:
• The market value; or
• The preceding year’s appraised value; PLUS 10 percent for each year since the
property was reappraised; PLUS the value of any improvements added since the last
re-appraisal.
Values of capped properties must be computed annually. If a capped property sells, the cap
automatically expires as of January 1 of the following year. In that following year, that home is
reappraised at its market value to bring its appraisal into uniformity with other properties. New
homes are treated differently: while a developer owns them, unoccupied residences are
appraised as part of inventory using the district’s land value and the developer’s construction cost
as of the valuation date. However, in the year following the sale, they are reappraised at market
value.
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COMMERCIAL/INDUSTRIAL VALUATION
Commercial-Industrial Appraisal Process/Model Development
The most basic or general steps in the commercial/industrial appraisal process are
development of:
1. A primary market analysis of the region, areas, and neighborhoods that influence the
properties that are being appraised. Supply, demand, interest rates, economic outlook,
etc. are taken into consideration. Economic areas are defined by each of the improved
property use types (apartment, office, retail, warehouse and special use) based upon an
analysis of similar economic or market forces. These include but are not limited to similarities
of rental rates, classification of projects, date of construction, overall market activity or other
pertinent influences.
2. Economic area identification and delineation valuation system. All income model valuation
(income approach to value estimates) is economic area specific. Economic areas are
periodically reviewed to determine if re-delineation is required. The geographic boundaries
as well as, income, occupancy rates, expense levels and capitalization rates are all
considered in the development of value schedules or models, if that data is available.
3. A highest and best use analysis is performed for the property or properties being appraised,
looking at the most profitable use that is legal, physically possible and economically
feasible. For improved properties, highest and best use is evaluated as improved and as if
the site were still vacant. This assists in determining if the existing improvements have a
transitional use, interim use, nonconforming use, multiple uses, speculative use, excess land,
or a different optimum use if the site were vacant. Improved properties reflect a wide
variety of highest and best uses which include, but are not limited to: office, retail,
apartment, warehouse, light industrial, special purpose, or interim uses. In many instances,
the properties current use is the same as its highest and best use. The analysis ensures that
an accurate estimate of market value (which is based on value in exchange) is derived. It
is important to remember that market value is based on the following assumptions: (i) no
coercion of undue influence over buyer or seller in an attempt to force the purchase or sale
(ii) well-informed buyers and sellers acting in their own best interest. (iii) a reasonable time
for the transaction to take place, and (iv) payment in cash or its equivalent. In addition,
“market value” should not be confused with “value in use”, which represents the value of
a property to a specific user for a specific purpose, and not to the general market. By
definition, our task is to appraise at market value, which would be the value in exchange.
4. A collection and verification of data on sales price levels, capitalization rates, income
multipliers, equity dividend rates, occupancy, marketing periods, expenses, rent levels, and
actual construction cost, is made in all areas of Fannin County. The initial step in sales
verification involves questionnaire, which is mailed to the buyer. If a questionnaire is
answered and returned the documented responses are recorded into the sales database
system. If no information is provided, verification is then attempted via other sources such
as brokers, local appraisers, or other persons that may have the desired information. Finally,
closing statements are often provided during the hearing process.
The actual closing statement is the most reliable and preferred method of sales
verification. This data is ultimately incorporated into the value schedules for the
different properties and property types. All commercial and industrial properties
located in Fannin CAD are coded according to similar use; the approaches to value
are structured and calibrated based on this coding system. Weekly, sales transactions
are verified and keyed into a database. This sales information is used in the model or
schedule building and by the district’s appraiser. Lastly, appraisers field inspect sales to
review the accuracy of the existing data and identify changes that need to be noted.
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5. Schedules or tables are then developed, based on economic and appraisal theory, using
the data garnered from the sources noted above. The schedules are developed using the
unit of comparison that is dictated by the property type. Commercial and industrial
properties (improved) in the district are valued from cost, income and sales schedules using
a comparative unit method. The following is a discussion of how a schedule is developed.
Cost Schedules: The cost approach to value is applied to improved real property utilizing
the comparative unit method. This methodology involves the utilization of national cost
data reporting services as well as actual cost information on comparable properties
whenever possible. Cost schedules are typically developed based using Marshall Swift
Valuation Service data. Cost schedules begin with deriving the replacement cost new
(RCN) of all improvements. These include comparative base rates per unit adjustments
and lump sum adjustments. This approach also employs the sales comparison approach
in the valuation of the underlying land value. Time and location modifiers are necessary
to adjust cost data to reflect conditions in a specific market and changes in cost over a
period of time. Because a national cost service is used as a basis for the cost schedules,
local modifiers are necessary to adjust these base costs specifically for Fannin County.
These modifiers are provided by the national cost services.
Depreciation schedules are developed based on what is typical for each property type
at that specific age. Depreciation schedules have been implemented for what is typical
for each major class of commercial properties by economic life categories. Effective
age estimates are based on the observed amount of depreciation, and the wear and
tear of the improvements. Remodeling and renovation decrease effect age of
improvements; conversely, poor maintenance and abuse increase the effective age.
Market adjustment factors such as external and/or functional obsolescence can be
applied if warranted. It should be noted that industrial properties, due to their unique
nature and construction. Many times, the only applicable valuation methodology is the
cost approach. While the appraiser may employ a sales comparison approach, using
for comparison the closest available plant in terms of output quantity type of product
manufactured and other factors to estimate a value for the subject property, due to the
many numbers of variables to consider, the value estimate via this approach may not
be highly reliable.
Income Schedule: This income approach to value is applied to those properties which
are typically viewed by market participants and “income producing” and for which the
income methodology is considered a leading indicator of value. The first step in the
income approach pertains to the estimation of market rent on a per units’ basis. This is
derived primarily from actual data furnished by property owners and from local market
study publications. This per unit rental rate multiplied by the number of units results in the
estimate of potential gross rent. A vacancy and collection loss allowance is then
projected, based on actual data furnished by property owners or market sources.
The vacancy and collection loss allowance is subtracted from potential gross rent
estimate to yield an effective gross rent. Next a secondary income or service income is
calculated and added to the effective gross rent.
Secondary income includes parking income, escalations, reimbursements, etc.
Allowable expenses are taken from the effective gross income to arrive at the Net
Operating Income. Expense ratio estimates are also used in the calculations of the net
income. Different expense ratios are developed for different types of commercial
property based on use. Rates and multipliers are used to convert income into an
estimate of market value. These include income multipliers, overall capitalization rates,
and discount rates derived from the market. Rates and multipliers also vary between
property types, as well as by location, quality, condition, design, age, and other factors.
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Capitalization analysis is used in the income approach schedules. This methodology
involves the capitalization of net operating income as an indication of market value for
a specific property.
Sales Comparison (Market) Schedule: Although this methodology is utilized not only for
estimating land value but also in comparing sales of similarly improved properties. As
previously discussed in the Data Collection section of this report, pertinent data from
actual sales of properties, both vacant and improved, is garnered throughout the year
in order to obtain relevant information, which can be used in several aspects of
valuation. An analysis or schedule is developed, comparing sales of similar type
properties, and adjusting the schedule based on location, building size, age, condition,
etc. Using a Market Schedule, many property types in the commercial and industrial
area are reviewed annually to determine the present level of appraised value and
uniformity of appraisal.
6. The strengths and weakness of each approach to value is determined, based on the
applicability of the approach and the quantity and quality of the data. The schedules or
approach that provides the greatest reliability is ultimately the approach that is given
greatest emphasis. The values of the appropriate schedule are applied to those properties
in the analysis.
7. Lastly, a review is made of the values for properties that fall outside of the schedule.
Sometimes a highly customized or specialized commercial properties does not compare
well to other similar properties. As such, key comments and explanations are provided to
help the reader understand the appraisal process and the imperfection of it.
It should be noted that commercial appraisers are somewhat limited in the time available to
field review all commercial properties of a specific use type. However, a major effort is made by
appraisers to field review as many properties as possible or economic area experiencing large
numbers or remodels, renovation, or retrofits, changes in occupancy levels or rental rates, new
leasing activity, new construction, or wide variations in sales prices. Additionally, the appraisers
frequently field review subjective data items such as building class, quality of construction (known
as modifiers), for the property condition, physical, functional and economic obsolescence factors
contributing significantly to market value of the property. In some cases, field reviews are
warranted when sharp changes in occupancy or rental rate levels occur between building classes
or between economic areas. While in the field, the appraiser physically inspects sold and unsold
properties for comparability and consistency of values.
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BUSINESS PERSONAL PROPERTY VALUATION
Introduction
The personal property appraiser is responsible for developing fair and uniform market values
for business personal property located in Fannin CAD. There are basically three different personal
property types appraised by the district’s personal property appraiser.
Business Personal Property / Leased Assets; and Vehicles. The industrial personal property and
utility accounts are appraised by Thomas Y. Picket and Associates Inc., by contract.
Business Personal Property Appraisal Process/Model Development
The valuation of business personal property is somewhat unique in that personal property is
typically subject to changes year to year. Unlike real estate, which is immobile (in a fixed location),
issues dealing with business personal property tend to be wide ranging. As such, the general steps
in the business personal property process are somewhat different. These are:
1. SIC Code Analysis – Four-digit numeric codes, called Standard Industrial Classification (SIC)
codes that were developed by the federal government. These classifications are used by
appraisers as a way to classify personal property by business type.
2. Highest and Best Use Analysis – The highest and best use of a property is the reasonable
and probable use that supports the highest present value as of the date of the appraisal.
3. The highest and best use must be physically possible, legal, financially feasible, and
productive to its maximum. The highest and best use of personal property is normally its
current use.
4. Data Collection Procedures – A collection and verification of data on business personal
property, vehicles, and lease assets is made for all of Fannin CAD. The procedures for
collecting this data are outlined below.
Business Personal Property – The district’s property characteristic data was originally received
from the various taxing units in the district: cities, schools, and county records in the 1980s, and
updated as necessary through massive field data collection efforts coordinated by the district
over a period of time.
When revaluation activities permit, district appraisers’ collect new data via annual field
reviews. This project results in the discovery of new business not revealed through usual sources.
Various discovery publications such as court reported data and state sales tax listings are also
used to discover personal property. City and local newspapers, phone books, courthouse records
(assumed names records), state corporation records, and the public often provide the district
information regarding new personal property and other facts related to property discovery.
▪Vehicles – An outside vendor provides Fannin CAD with a listing of vehicles within its
jurisdiction. The vendor develops this listing from Texas Department of Transportation (DOT) Title
and Registration Division records. Other sources of data include property owner renditions and
field inspections.
▪Leased Assets – The primary source of leased assets is property owner renditions. Other
sources of data include field inspection.
Schedules of tables are then developed, based on economic and appraisal theory, using the
data garnered from sources noted above. The schedules are developed using the unit of
comparison that is dictated by property type. The development of the different schedules is
outlined below.
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1. Cost Schedules – The cost schedules are developed by analyzing cost data from
property owner’s renditions, hearings, state schedules and published cost guides. The
cost schedules are reviewed as necessary to conform to changing market conditions.
The schedules are typically in a price per square foot format.
2. Depreciation Schedules and Trending Factors – Fannin CAD’s primary approach to
the valuation of business personal property is the cost approach. The replacement
cost new (RCN) is either developed from property owner’s reported historical cost or
from the district’s valuation model. The trending factors used by the district to develop
RCN are based on published valuation guides. The percent good depreciation
factors used by the Fannin CAD are based on published valuation guides. The index
factors and percent good depreciation factors are used to develop Present Value
Factor (PVF) by year of acquisition, as follows:
PVF = Index Factor X Percent Good Factor
The PVF is used as an “express” calculation in the cost approach.
The PVF is applied to reported historical cost as follows:
3. Vehicles – Value estimates for vehicles are provided by an outside vendor and are
based on NADA published book values. Vehicles that are not valued by the vendor,
are valued by an appraiser using PVF schedules, or published guides.
4. Leased Assets – Leased assets are valued using PVF schedules mentioned above. If
the asset to be valued in this category is a vehicle, then NADA published book values
are used. Assets that are not valued by the vendor, are valued by the appraiser using
PVF schedules, or published guides.
5. A review is made of the values for properties that fall outside of the schedules.
Sometimes, highly customized or specific use business personal property does not compare
well to other similar properties. As such, key comments and explanations are provided to help the
reader understand the appraisal process and the imperfection of it.
It should be noted that personal property, like the commercial appraiser, is somewhat limited
in the time available to field review all personal property of a specific type or use. However, a
major effort is made by the appraiser to field review as many properties as possible.
UTITILITES, INDUSTRIAL PERSONAL PROPERTY
Minerals (Oil and Gas Reserves), Valuation Process
Fannin Central Appraisal District contracts with Thomas Y. Pickett & Associates. of Dallas,
Texas, for the valuation of industrial personal property within the boundaries of the appraisal
district. Please refer to the current Biennial Reappraisal Plan that was developed by the Appraisal
District.
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CERTIFICATION
The statement of facts in this report is true and correct.
The report analysis, opinions and conclusions are limited only by the report assumptions and
limiting conditions and my personal, impartial and unbiased professional analysis, opinions and
conclusions.
I have no present or prospective interest in the properties that are subject of this report, and
I have no personal interest with respect to the parties involved.
I have no bias with respect to any property that is the subject of this report or to the parties
involved with this assignment.
My engagement in this assignment was not contingent upon developing or reporting
predetermined results.
My compensation for completing this assignment is not contingent upon the reporting of a
predetermined value or direction in value that favors the cause of the client, the amount of the
value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event
directly related to the intended use of this appraisal.
My analysis, opinions, and conclusions were developed, and this report has been prepared
in conformity with the Uniform Standards of Professional Appraisal Practice.
I have not made a personal inspection of all properties that are subject of this report.
Tylene Gamble
__________________________________________
Tylene Gamble, RPA, RTA, CTA, CCA
Chief Appraiser
Fannin Central Appraisal District
