Detailed Narrative Summary Report
Top Japanese
   Appraisal & Valuation Service
  Value Workers, Inc.
             
20-1-303, Kitamachi, Shinjuku, Tokyo, Japan
E-mail: info@value-workers.com
  (Please contact us via E-mail.)
 
[Appraisal Approaches]

We named our narrative report "Detailed Narrative Summary Report". This level of reporting is normal in Japanese real estate appraisal. It is different from "Full Narrative" at the point that it sets the persuasiveness above the completeness.

Report is available either in Japanese (which fulfills the requirements set forth in JREAS), or in English (which fulfills the requirements set forth in USPAP).

In principle, we try to apply following three approaches.

1. Cost Approach
    This approach indicates the value by focusing on the cost.
2. Market Approach
    This approach indicates the value by focusing on the market.
3. Income Approach
    This approach indicates the value by focusing on the income.

(Notes)
Please note that, in Japan we can hardly apply Direct Sales Comparison Method for built-up properties, except for condominiums, etc. This method is thought to be not so reliable in Japanese real estate business custom backed by the shortness of actual service life of buildings, the ultra-high price of land, and the highly-detailed zoning regulations.
Also, in built-up areas, we can hardly apply Cost Approach for lands. This would be common also in other countries.
On the other hand, for lands suit for condominium construction or for subdivision development, we apply Development Method.



[Importance of Detailed Narrative Appraisal]

We recommend our "Detailed Narrative Summary Report" supported by high level communication.
In some types of properties, large deviations may appear among the values indicated by each approaches.
Under the prolonged economic depression in Japan, sales prices of special purpose business properties had been much lower than their values indicated by Cost Approach.
We could not explain that reason adequately in "Simple Appraisal Report". So clients could not realize the reason why their market prices became such low level. There happened numerous troubles.
Narrative Appraisal Report with high level communication could have prevented such troubles.

e.g.

< City Hotel >
There was such a case, "construction cost (including land value) was JPY 10,000,000,000.
Company went bankrupt, and the disposal price was JPY 2,000,000,000 three years later".

< Resort Hotel >
Onerous sale of resort hotels of which business got worsened were sometimes difficult.

< Super Market >
There was such a case, "construction cost (including land value) was JPY 7,000,000,000.
But the disposal price was JPY 300,000,000 ten years later".

< Golf Course >
There was such a case, "development cost (including land value) was JPY 15,000,000,000.
But the disposal price was JPY 1,000,000,000 ten years later".

< Ski Resort >
There was such a case, "development cost (including land value) was JPY 23,000,000,000.
But the disposal price was JPY 300,000,000 ten years later".

< Hospital, remote from city >
A hospital (12 years old) went bankrupt.
Value indicated by the Cost Approach was JPY 600,000,000.
But, there was no buyer even at JPY 60,000,000.
(Documentation Requirements)

Please prepare following documentation.

(e.g. Office Building)
1. Documents to identify the subject property. (copy)
2. Property tax notice. (copy)
3. Building drawings. (copy)
4. Confirmation of construction of the building. (copy)
5. Lease agreements (copy)
6. Long-term repair schedule, or Engineering Report. (copy)
7. Purchase contract. (copy)
8. Other data & documents (copy)
      -- Any additional data, if needed.
Sample  --- click here ---
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