KSA 79-1437 section C through E require that no deed or instrument providing for the transfer of title to real estate or affidavit of equitable interest in real estate be recorded in the offices of the Register of Deeds unless it is accompanied by a Real Estate Validation Questionnaire completed and signed by either the grantor or grantee.
The Real Estate Sales Validation Questionnaire has two main purposes. One is to acquire information to be entered into the county sales date file and used as comparable sales, the other is to acquire sales information to be used in the State Sales Ratio Study.
Valid sales are used:
As a contributing factor in the development of the county index which is used to calibrate the replacement cost new for the cost approach.
To derive estimates of land values and build CALP (Computer Assisted Land Pricing) models.
In the cost approach to obtain market based indicators for building depreciation models.
In the market approach as comparables.
In the market approach to develop sales adjustment models.
In the income approach as a source for developing capitalization rates and gross rent multipliers.
As benchmark sales to test or check the quality of the cost, sales comparison, and income approach models. (Benchmark sales are those which best reflect the prudent actions of buyers and sellers.)
In performance evaluations to determine a median sales ratio and C.O.D. (Coefficient of Dispersion) for a sample of properties.
"Fair market value" means the amount in terms of money that a well informed buyer is justified in paying and a well informed seller is justified in accepting for property in an open and competitive market , assuming that the parties are acting without undue compulsion. (K.S.A. 79-503a)
Real estate sales employed as appraisal benchmarks, incorporated in valuation models and selected to evaluate performance, are useful only to the extent they truly serve as proxies of fair market value.