Appraisal Flashcards
State Licensed appraiser
Up to 1M
Or $250k if complex
1-4 residential units
Certified residential appraiser
All residential real estate not requiring a development analysis, appraisal, regardless of value or complexity
Certified general appraiser
all types of real estate
Nature of vale
Demand
Utility
Scarcity
Transferability
Fair market value
Willing buyer
Willing seller
Neither is under duress
Sufficient time
Cost
Past paid
Highest and best use
Is it legal?
Is it possible?
Of the possibilities, what creates the most vale
Letter form
Quick easy way to report estimate of Value contains 4 parts to an appraisal, less than a full page.
Statement of value only very accurate still
Short form or checklist
Used primarily by lenders, standardized forms.
Narrative report
An estimate of value and then gives reasons to justify that. Photos maps etc.
Commercial and industrial
Most comprehensive
Essential parts of an appraisal
Date
Property description
Estimate of value
Signature
Substitution
No prudent person will pay more than he has to. Basis to comparison approach.
Conformity
Value is created on the idea that reasonable similarity is maintained on properties in a given area
Balance
Balanced between labor capital management and land
Assemblage plottage
Assembling two levels of property to create a useable value.
Situs
Preference on location
Service property
Church, government buildings
Three types of approach
Market data,
Cost
Income
Cost approach types
Cost reproduction
Cost replacement
Formula
Methods of determining cost
Quantity surveys
Unit in place
Cubic foot method
Square foot method
Quantity survey
Materials + labor +management + profit =value
Unit in place
Appraiser determines the cost of components or estimates of subcontractors
How much would an arch cost and how much would the sub charge to place it?
Cubic foot
Warehouse is most appropriate here.
Square foot method
Most common method
Marshall and swift subscription
Outside measurements
Parts of an appraisal
Date
Description
Estimate value
Signed
Cost reproduction approach
How much it would cost to build an exact replica of the building this approach can be difficult and costly since accuracy is important
Cost replacement
What does it cost to construct a building having the same utility as the subject property since utility is the key factor the building may vary in nonessential ways
Formula approach
Land plus improvements minus depreciation equals value. The cost approach is the only one of the three appraisal approaches, which gives a separate specified value to land.
Physical life
How many years since the building was actually built
Economic life, or age
How much longer is it estimated that the building can be productively used?
Effective age
How many years old is the building when compared to other buildings and it’s condition it can be several years, older, or less than the physical age due to the care that it has received
