Flashcards in Chapter 16 - Appraisal Deck (22):
Some extra that contributes to owner satisfaction: clean air, view, etc.
An estimate of value by someone who has specific training as an appraiser.
Independent person trained to estimate value.
The rate of return a property produces on the owner's investment.
Properties listed in an appraisal report or a CMA that are substantially equivalent to the subject property. Also called comps.
The process of estimating value of a property by adding to the estimated land value the appraiser's estimate of the reproduction or replacement cost of the building less depreciation.
In appraisal, a loss in value in property due to ant cause including physical deterioration, functional obsolescence, and locational obsolencense.
Reduction in a property's value caused by factors outside the subject property such as social or economic forces or objectionable neighboring property. also called location obsolescence or economic obsolescence.
Gross Income multiplier (GIM)
When property has income from other sources than rent such as concessions it can be used to multiply income with this rate to determine value.
Highest and best use
The possible use of land that would produce the greatest income and thereby develop the highest land value.
The process of estimating value of an income producing property by capitalization of the annual net income expected to be produced by the property during its remaining useful life.
What a property actually sells for - its selling price.
An estimate based on analysis of comparable sales and other pertinent market data.
Represents normal wear and tear. It may be curable, or incurable.
The final step in the appraisal process, in which the appraiser reconciles the estimates of value received from the direct sales comparison data, cost data, and income approaches to arrive at a final estimate of value for the subject property.
The construction cost at current prices of a property that is not necessarily an exact duplicate of the subject property but serves the same purpose as the orginal.
The construction cost at current prics of an exact duplicate of the subject property.
Sales comparison approach
The process of estimating the value of a property by examining and comparing actual sales of comparable properties.
The location of a particular property and people's preferences for particular locations, is a major factor affecting value. Location, location location.
Property being appraised.
Principle that states the maximum value of a property tends to be set by the cost of purchasing another, equally desirable property assuming no undue cost because of delay. For example two houses are for sale in an area, the less expensive one sells first.