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Real Estate National Key Facts > N9 Appraisal > Flashcards

Flashcards in N9 Appraisal Deck (39)
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1

An estimate of opinion of value.

Appraisal

2

Four Major Elements of Value:
1. _____________
2. _____________
3. _____________
4. _____________

1. Demand
2. Utility
3. Scarcity
4. Transferability

NOTE: use DUST

3

Market Value

The amount a willing buyer will pay and a willing seller will accept.

4

A transaction in which the parties are dealing from equal bargaining positions.

Arm's Length Transaction

5

Market Price

The actual amount of money given in a transaction.

6

The amount of money required to build a building at current prices.

Cost

7

The principal of _________ states that value is affected by the scarcity of a product and the desire for that product.

Supply & Demand

8

Highest and Best Use

The use of a property that produces the highest net return.

9

Land that is not needed to accomplish the highest and best use.

Excess Land

10

The principal of _________ states that the most a person will pay for a product is set by what it costs to buy a reasonable duplicate.

Substitution

11

That value will tend to be more stable in an area where there is a reasonable degree of similarity of property types is a statement of the principal of ___________.

Conformity

12

The principle of _______ holds that the presence of lesser properties will adversely affect the value of greater properties.

Regression

13

The principle of ______ holds that the value of a component part is determined by how much that part adds to or detracts from the value of the whole.

Contribution

14

The fact that values do not remain constant is a statement of the principle of _______.

Change

15

The principle of ________ holds that excess profits will breed competitors, which will then reduce profits.

Competition

16

The fact that value is affected by the anticipation of future events is a statement of the principle of ________.

Anticipation

17

Appreciation

An increase in value for any reason.

18

Increase in value due to the owner’s efforts.

Earned Increment

19

Unearned Increment

An increase in value due to no effort by the owner.

20

Plottage AKA Assemblage.

An increase in value created by joining smaller parcels into one larger parcel.

21

Depreciation

A decrease in value for any reason.

22

Deterioration

A loss in value due to physical wear and tear.

23

A loss in value due to outdated features such as an old bathroom or kitchen.

Functional Obsolescence

24

A loss in value created by technological advances.

Functional Obsolescence

25

A loss in value created by a poor floor plan.

Functional Obsolescence

26

Curable

When it is economically feasible to fix a defect.

27

When it is not economically feasible to fix a defect.

Incurable

28

A loss in value that results from conditions outside the property.

Economic Obsolescence AKA External Obsolescence

29

The three appraisal approaches are:
1. ______________
2. ______________
3. ______________

1. Comparison aka Market Data
2. Cost aka Summation
3. Income aka Capitalization

30

Estimating the value of a property by comparing the subject property to similar properties that have recently sold .

Comparison aka Market Data