Appraisal And Land Use

Question 1

Vacancy Factor

Answer 1

Lost income because of a vacant unit

Question 2

Demand

Answer 2

The desire to buy or obtain a commodity

Question 3

Fiscal Year

Answer 3

A year as reckoned for tracking or accounting purposes

Question 4

Effective Gross Income

Answer 4

The anticipated income resulting from estimated potential gross income from a rental property less an allowance for vacancy and bad debts

Question 5

Front Footage

Answer 5

The width of a property along the street

Question 6

Economic Age

Answer 6

Age of a building determined by its condition and usefulness

Question 7

“DUST”

Answer 7

The 4 elements that create value: Demand, Utility, Scarcity, Transferability

Question 8

Effective Age

Answer 8

The years or age shown by the condition and utility of a structure, rather than its actual or chronological age

Question 9

Utility Value

Answer 9

The usefulness of the property

Question 10

Cost Approach

Answer 10

An appraisal method that estimated replacement cost of the improvements, deducts estimated accrued depreciation, and then adds market value of the land.

Question 11

Assemblage

Answer 11

Putting several smaller, less valuable parcels together under one ownership to increase value of total property

Question 12

Depreciation

Answer 12

Loss in value from any cause

Question 13

Ad Valorem

Answer 13

A Latin prefix meaning according to value. Local governments levy real property tax based on the assessed value. Property taxes are known as ad valorem taxes.

Question 14

Cap Rate

Answer 14

A term sometimes used to refer to capitalization rate

Question 15

Subdivision

Answer 15

A plot of land divided into smaller portions for the purpose of building

Question 16

Variance

Answer 16

An exception granted to existing zoning regulations for special reasons

Question 17

Accrued

Answer 17

Accumulated over a period of time

Question 18

Reproduction Cost

Answer 18

The current cost of building a replica of the subject structure using similar quality materials: refers to exact duplication of the buildings: usually costs more than replacement costs

Question 19

Appraisal Report

Answer 19

A written report setting forth an appraiser’s estimates of value of a subject property

Question 20

Reconciliation

Answer 20

Sometimes called correlation l, this is the adjustment process of weighing the results of all three appraisal methods to arrive at a final estimate of market value for the subject property

Question 21

Actual Depreciation

Answer 21

That depreciation is occurring as a result of physical, functional, or economic forces that cause loss in value to a building

Question 22

Book Value

Answer 22

The initial cost of the property plus capital improvements and minus the total accrued depreciation

Question 23

Cost

Answer 23

Represents expenses in money, labor, material, or sacrifices in acquiring or producing something

Question 24

Value

Answer 24

The power of goods or services to command other goods in exchange for the present worth of future benefits arising from ownership

Question 25

Assessed Value

Answer 25

Value placed on property by a public tax assessor as a basis for taxation

Question 26

Effective Demand

Answer 26

The desire couple with purchasing power

Question 27

Capital Improvements

Answer 27

Any permanent improvement made to real estate for the purpose of increasing the useful life of the property or increasing the property’s value

Question 28

Appraisal

Answer 28

An act or process of developing an opinion of value

Question 29

Deferred Maintenance

Answer 29

Negligent care of a building

Question 30

Sales Comparison Approach

Answer 30

An appraisal method using the principles of substitution to compare similar properties

Question 31

Actual Age

Answer 31

The real age of a building

Question 32

Net Income

Answer 32

Sometimes known as net operating income. The remaining income after operating expenses have been subtracted from the gross income of a property

Question 33

Income Approach

Answer 33

A method of appraising property based on the property’s anticipated future income

Question 34

Gross Income Multiplier (GIM)

Answer 34

A conversion factor derived from the sales price of a comparable rental property divided by its gross rent and any other miscellaneous income. This factor is multiplied by the estimated gross rent of the subject to estimate its value.

Question 35

Accrued Depreciation

Answer 35

The difference between the cost to replace the property and the property’s current appraised value

Question 36

Environmental Impact Report

Answer 36

A study of how a development will affect the ecology of its surroundings

Question 37

Price

Answer 37

What is paid for something

Question 38

Market Rent

Answer 38

The rent a property should bring in the open market

Question 39

Condemnation

Answer 39

A common name for eminent domain, or the right of the government to take private property from an owner for public use, paying fair market value

Question 40

Transferability

Answer 40

The ability to transfer ownership of an item from one person or entity to another

Question 41

Supply

Answer 41

The total amount of an item that is for sale or lease, at various prices, at any given point in time

Question 42

Corner Lot

Answer 42

A lot found at the intersection of two streets

Question 43

Economic Life

Answer 43

The estimated period over which an improved property may be profitably used to yield a return

Question 44

Operating expenses

Answer 44

Expenditures necessary to the operation of an income-producing building

Question 45

Gross rent multiplier (GRM)

Answer 45

A figure which, when multiplied by the monthly rental income, equals the property’s market value

Question 46

Replacement Cost

Answer 46

The cost of replacing improvements with modern materials and techniques

Question 47

Appreciation

Answer 47

An increase in value

Question 48

Contract Rent

Answer 48

The amount of rental income due from the tenant as agreed in the lease agreement

Question 49

Principle of Anticipation

Answer 49

The market anticipates the future benefits that are to be derived from the property

Question 50

Capitalization

Answer 50

The process of calculating the present worth of a property on the basis of its capacity to continue to produce an income stream

Question 51

Scarcity

Answer 51

Less availability of a commodity in the marketplace resulting in increased value when demand exceeds supply

Question 52

Market Value

Answer 52

The price the property would bring if freely offered on the open market with both a willing buyer and a willing seller

Question 53

Eminent Domain

Answer 53

The right of the government to take private property from the owner, for public use, and paying for the fair market value

Question 54

Comps

Answer 54

A term used by real estate agents and appraisers to mean comparable properties

Question 55

Functional Utility

Answer 55

The combined factors of usefulness with desirability

Question 56

Principle of Substitution

Answer 56

The market value of a property is affected by the cost of obtaining an equally desirable and valuable property as a substitute

Question 57

Calendar Year

Answer 57

This starts on January 1st and continues through December 31st of the same year.

Question 58

Improvements

Answer 58

Additions to real property; can be natural (e.g. trees or a lot feature) but usually are man-made; substantial fixtures, such as building

Question 59

Cul-de-Sac Lot

Answer 59

A lot on a dead end sreeer

Question 60

Gross Rent

Answer 60

Income (figured annually) received from rental units before any expenses are deducted