Chapter 16: Essentials Of New Jersey Real Estate. Key Terms Part 2

Question 1

Market price

Answer 1

What a property actually sells for

Question 2

Market value

Answer 2

The price that would be paid by an informed buyer….. The probable price a ready willing and able, informed buyer would pay and a ready willing and able, informed seller would except neither being under any pressure to act - after allowing for a reasonable exposure time on the market.

Question 3

Physical deterioration

Answer 3

A loss of value due to wear and tear.

Question 4

Reconciliation

Answer 4

The analysis of values received by different appraisal approaches.
The three approaches are: (1)sales comparison approach to value, (2)cost approach to value and (3)income capitalization approach to value.

Question 5

Replacement cost

Answer 5

The cost to rebuild using today’s materials and techniques.

Question 6

Sales comparison approach

Answer 6

The appraisal technique that analyzes sale prices of comparable properties.

Question 7

Reproduction cost

Answer 7

The cost to rebuild exactly, using materials like the original.

Question 8

Situs

Answer 8

Loss of value due to wear and tear.

Question 9

Subject property

Answer 9

A parcel of real estate being appraised

Question 10

Substitution

Answer 10

The principle that no one pays more of the same can be had for less.

Question 11

Value

Answer 11

The present worth of future benefits.