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~ L~.:. Fonn ROW-A-6 Rev. 4/2003 GSD-EPC PAGE 4 OF 5 Explanation of Adjustments with Reconciliation: SITE VALUATION: In order to estimate the market value of the subject property, the appraiser employed the sales comparison approach. "The sales comparison approach may be used to value land that is actually vacant, or land that is being considered as though vacant for appraisal purposes. Sales comparison is the most common technique for valuing land, and it is the preferred method when comparable sales are available. To apply this method, sales of similar parcels of land are analyzed, compared, and adjusted to provide a value indication for the land being appraised. In the comparison process the similarity or dissimilarity of the parcels is considered (The Appraisal of Real Estate, 1 ih Edition, Pg. 324)." The sales comparison approach applies the principle of substitution, as it is predicated on the assumption that no prospective purchaser is warranted in paying more for a given property than the price for which another property may be purchased, assuming that the other property is of equal functional utility and appeal, and has comparable future earning capabilities. It is considered to be reliable and accurate as it measures the actions of buyers and sellers in the typical market place. Its main weakness is that although two properties may be similar, no two properties are ever exactly alike. Also, the exact conditions of these sales are sometimes unknown, or are not revealed to the appraiser. The sale comparison approach analysis as made herein was conducted within the framework of the defmition of market value. In valuing this property, an analysis was made of the surrounding neighborhood to gather information concerning sales of comparable properties, as well as properties for sale at this time. In order to locate sales of vacant tracts within the market area, a search was made of the Lamar County Deed Records, as well as conversations held with area real estate professionals. Adjustment factors which are generally considered when analyzing land sales include property rights conveyed, fmancing, condition of sale, market conditions, and physical <;:haracteristics such as zoning, location, size, frontage, access, shape, flood plain influence and utility availability. The fIrst four characteristics, property rights conveyed, fmancing, condition of sale, market conditions, will always impact value regardless of the particular sub- market. However, individual sub-markets will dictate which of the physical factors are the most critical and are recognized by buyers and sellers of real property in that particular area. As such, not all of the above mentioned physical characteristics have an impact on values in all cases. These adjustment factors, and their impact on values, will be discussed in the following paragraphs. Financing: Finance adjustments are made to those sales which have atypical financing. A cash equivalency is generally detennined to bring a sales price as close to cash, or terms equivalent to cash, as possible. All four of the sales used herein involved cash or third party financing and no adjustments were needed. Condition of Sale: A condition of sale adjustment may arise if a particular transaction does not meet the requirements requisite to a "fair sale". Typically, adjustments for condition of sale account for motivations of buyer and seller. In each instance where knowledgeable participants in the sale transactions indicated extraordinary conditions of sale, adjustments are applied. Market Conditions: The subject property is located in an area that has experienced some economic growth in the past five year period. Based upon the data available, there is no information which warrants adjustment for a change in market condition during the time period the sale transactions occurred. There are numerous tracts of land available for development and redevelopment within the subject neighborhood. As such, it is our opinion that until significant absorption occurs, there will be limited upward pressure on sale prices. With that in mind, the sales considered within this analysis are not deemed to require adjustment for market conditions. Page 4