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King County Department of Assessments

Fair, Equitable, and Understandable Property Valuations

Department of Assessments

500 Fourth Avenue,
Suite ADM-AS-0708,
Seattle, WA 98104

Office Hours:
Mon - Fri
8:30 a.m. to 4:30 p.m.

TEL: 206-296-7300
FAX: 206-296-5107
TTY: 206-296-7888

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Glossary of terms for commercial parcels

SALES COMPARISON APPROACH
Based on the concept of value in exchange, the sales comparison approach compares the property being appraised with similar properties sold in the recent past. The characteristics of the sold properties are analyzed for their similarity to those of the subject of appraisal.  Because no two parcels are exactly alike, the prices of the sold properties must be adjusted for any differences between the properties and the subject property. Value indications derived from the sales comparison approach are usually considered particularly significant because they express the reactions of buyers and sellers in the real estate market. The sales comparison can be used to value any property, whether improved or vacant, as long as that type of property is being exchanged periodically in the market.

SINKING-FUND METHOD
A way of calculating the recapture rate in the income approach. It assumes that an investor will deposit recapture income in an interest-bearing account and will thus, in effect, accelerate recapture.  To use it, an appraiser goes to a compound interest table to locate the interest rate the investor would probably get and looks down the column of sinking-fund factors to the number of years equal to the remaining economic life of the improvements.  Adding that sinking-fund factor to the discount rate gives the recapture rate.