The commercial lot to be appraised has existing gasoline station with two storey commercial building .To get the market value of the land by using sales comparison approach , opinion survey from bank appraiser and income approach using discounted cash flow analysis. We have to set under the assumptions and limiting conditions that the property to be appraised is for land only excluding the building . There were two contiguous lot to be appraised so we have to defined our basis of value if we value the lot as a whole , so our basis of value would be synergistic value . Synergistic Value means an additional element of value created by the combination of two or more assets or interests where the combined value is more than the sum of the separate values. The advantage of synergistic value is that usually the market value as a whole is greater than the market value as individual for two contiguous lot , why is this? its because from the elements of comparison , the adjustments will be different and therefore superior from the comparables .The appraiser gathered comparable data for sales comparison approach and inquiry from knowledgeable appraiser exposed to that area .From Income approach using discounted cash flow analysis , we will get first the value of the building from within the property . Using discount rate say 6% , we can easily get the present worth factor for the period of 15 years as per contract lease agreement basis , then we will sum it up from the value of the land and building for reversion .We then reconcile the value of the sales comparison approach , inferential opinion survey and the income approach using discounted cash flow analysis .
