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RE Licensing Exam - Terms Study > Appraisal and Land Use > Flashcards

Appraisal and Land Use Flashcards

1
Q

Subdivision

A

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

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2
Q

Functional Utility

A

The combined factors of usefulness with desirability.

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3
Q

Cul-de-Sac Lot

A

A lot on a dead-end street

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4
Q

Fiscal Year

A

A year as reckoned for taxing or accounting purposes

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5
Q

Assemblage

A

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

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6
Q

Cost

A

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

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7
Q

Book Value

A

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

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8
Q

Scarcity

A

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

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9
Q

Market Value

A

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

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10
Q

Net Income

A

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

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11
Q

Corner Lot

A

A lot found at the intersection of two streets

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12
Q

Appreciation

A

An increase in value

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13
Q

Deferred Maintenance

A

Negligent care of a building

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14
Q

Sales Comparison Approach

A

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

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15
Q

Transferability

A

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

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16
Q

Economic Life

A

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

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17
Q

Front Footage

A

The width of a property along the street

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18
Q

Cost Approach

A

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

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19
Q

Income approach

A

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

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20
Q

Accrued Depreciation

A

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

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21
Q

Operating expenses

A

Expenditures necessary to the operation of an income-producing building

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22
Q

Gross Rent

A

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

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23
Q

Depriciation

A

Loss in value from any cause

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24
Q

Capital Improvements

A

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

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25
Q

Principle of Anticipation

A

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

26
Q

Comps

A

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

27
Q

Variance

A

An exception granted to existing zoning regulations for special reasons

28
Q

Appraisal

A

An act or process of developing an opinion of value.

29
Q

Supply

A

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

30
Q

Gross income multiplier (GIM)

A

A figure which, when multiplied by the annual gross income from all sources, not just annual rent, equals the property’s market value.

31
Q

Gross rent multiplier (GRM)

A

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

32
Q

Demand

A

The desire to buy or obtain a commodity

33
Q

Cap Rate

A

A term sometimes used to refer to capitalization rate

34
Q

Utility Value

A

The usefulness of the property

35
Q

Environmental Impact Report

A

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

36
Q

Improvement

A

Any buildings or structures on a lot

37
Q

Effective Age

A

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

38
Q

Calendar Year

A

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

39
Q

Actual Depreciation

A

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

40
Q

Market Rent

A

The rent a property should bring in the open market

41
Q

Effective Gross Income

A

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

42
Q

“DUST”

A

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

43
Q

Assessed Value

A

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

44
Q

Contract Rent

A

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

45
Q

Price

A

What is paid for something

46
Q

Eminent Domain

A

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

47
Q

Actual Age

A

The real age of a building

48
Q

Condemnation

A

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

49
Q

Reproduction Cost

A

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

50
Q

Economic age

A

Age of a building determined by its condition and usefulness.

51
Q

Value

A

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

52
Q

Vacancy Factor

A

Lost income because of a vacant unit

53
Q

Ad Valorem

A

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

54
Q

Principle of Substitution

A

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

55
Q

Effective Demand

A

The desire coupled with purchasing power.

56
Q

Accrued

A

Accumulated over a period of time

57
Q

Replacement Cost

A

The cost of replacing improvements with modern materials and techniques

58
Q

Appraisal Report

A

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

59
Q

Capitalization

A

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

60
Q

Reconciliation

A

Sometimes called correlation, 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.

RE Licensing Exam - Terms Study (5 decks)

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