Chapter 16: Essentials Of New Jersey Real Estate. Key Terms Part 1 Flashcards Preview

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Flashcards in Chapter 16: Essentials Of New Jersey Real Estate. Key Terms Part 1 Deck (13):
1

Amenity

The extra that contributes to an owner satisfaction: clean air, view and so on...

2

Appraisal

The process of estimating a value.

3

Appraiser

An independent person trained and licensed to estimate value.

4

Capitalization rate

A rate of return a property produces on the owners investment.

5

Comparables

The similar nearby properties that have recently sold.

6

Cost approach

The analysis of rental income, used roughly in sales comparison approach.

7

Depreciation

The loss of value due to any cause.

8

External obsolescence

A loss of value due to factors be on the property boundaries. Such as social or environmental forces or objectionable neighboring property. Also called locational obsolescence or economic obsolescence.

9

Functional obsolescence

A loss of value due to worn or outmoded features. A loss of value to an improvement to real estate due to becoming outdated, often caused by age or poor design.

10

Gross income multiplier

The analysis of income including rental and other factors.

11

Gross Rent Multiplier (GRM)

The analysis of rental income, used roughly in sales comparison approach. It is the Sales Price divided by the Rental Income known as the Gross Rental Multiplier. SP\RI=GRM

12

Highest and best use

The use of land that you're the most money.

13

Income approach

The analysis of value of property using the (ROI) return on investment.