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Real Eastate > Appraisal > Flashcards

Appraisal Flashcards

0
Q

Anticipation

A

The appraisal principle that value increase or decreases based on the future benefit or detriment that may be received

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1
Q

Accrued depreciation

A

Total depreciation to date ( Yearly depreciation x number of years

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2
Q

Appraisal

A

An estimate of value

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3
Q

Appraisal Institute

A

National Association of real estate appraisers who are governed by a code of ethics and control the awarding of various appraisal designations as senior residential appraiser (SRA ) and member appraisal Institute ( MAI )

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4
Q

Appraisal value

A

An estimate of what a Parcell of property will sell for. Estimate of market value

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5
Q

Appreciation

A

Increase in value

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6
Q

Assemblage

A

The process of combining two or more lots to make the resulting parcel more valuable. Increasing value is known as plottage

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7
Q

Assess value

A

Value which the city or town places On property as a base for determining taxes ( Appraised value x assessment right )

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8
Q

Assessment rate

A

The percent of the assessed value that will be tax

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9
Q

Capitalization rate

A

(Cap rate.) Comparison of value to Net income used by an appraiser to estimate value of income property. Net income divided by value

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10
Q

Certified appraisaler

A

Professional appraisal designation under the financial institutions to reform. Recovering and enforcement act if( FIRREA ) requiring a special amount of classroom hours of training field experience and passing a state examination

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11
Q

Change

A

One of the economic variables to value real estate appraisal that recognizes that things are in the state of flux and do not remain constant

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12
Q

Comparative market analysis (CMA )

A

An opinion of value derived by market analysis by licensed sales person Or broker

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13
Q

Comparable

A

A recently sold or currently for sale parcel real estate that is similar to the subject property being appraised. Use as an indicator of value in the market comparison appraisal approach

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14
Q

Condemnation

A

The administration or judicial procedure used to taking land by local state or federal government for the public good called eminent domain

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15
Q

Conformity

A

The principle which holds that a house will hold it’s value better in an area of like types home

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16
Q

Contribution

A

An appraisal principle that deals with the amount of increase in value to a piece of property because by improvements to the property ( may be more or less than the cost of the improvements )

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17
Q

Cost

A

?

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18
Q

Cost approach

A

Method of real estate appraisal the estimated value by calculating replacement or reproduction cost

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19
Q

Decreasing return

A

Concept in appraisal that holds some Improvements to real estate increase value by less than the amount invested

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20
Q

Demand

A

One of the elements of value and appraisal. The amount of goods that the market will buy at a certain price. Associated with supply

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21
Q

Depreciation

A

A reduction in value due to any cause. In appraisal of real estate it includes physical deterioration functional obsolescence Economic obsolescence

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22
Q

Economic obsolescence

A

Loss of value do to a number of forces outside the property owners control and including economical environmental and social change. A principal used it appraised

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23
Q

Exchange

A

A transaction whereby part of the consideration includes properties of like kind and or use. Capital gains tax deferment may be a obtained using an exchange if the transaction conforms to all requirements and IRS code 1031

24
Q

Fiduciary

A

One who is in a position of trust and confidence

25
Q

Financial institutions Reform recovery and enforcement act ( FIRREA )

A

Federal legislation setting minimum standards each state must establish to regulate the real estate appraisal profession

26
Q

Functional obsolescence

A

A lost in value due to outdated quality Caused by age or poor design. Maybe curable such as outdate electric wiring or incurable such as low ceiling height

27
Q

Gross income

A

Total revenue from rents or orger sauces ( prior to any deductions for any expenses

28
Q

Gross rent multiplier

A

A ratio of market value compared to gross rent. Use by an appraiser to estimate value when the gross rent and the gross rent multiplier are unknown

29
Q

Highest and best use

A

Use an appraisal concept that identifies the use of a parcel property that produces the highest net return and therefore the highest value

30
Q

Income approach

A

Appraisal technique that uses the amount of net income property will produce over its useful life to determine value. The net income ( gross income less expenses ) is divided by capitalization rate determined by experience to determine value

31
Q

Increasing return

A

Concept that appraisal that holds some improvements to real estate increase value by more than the amount invested

32
Q

Market approach

A

Appraisal technique that compares the subject property to similar properties that have sold recently to establish value

33
Q

Market value

A

The most probable price property will bring assuming a knowledgeable seller and buyer and a fair and open market and a reasonable time to market

34
Q

Massachusetts Association of real estate appraisers

A

State Association of real estate appraisers that set standards regulates membership and issues professional designations of accomplishments

35
Q

Member appraisal Institute ( MAI )

A

Professional designation issued to Real estate appraises by the appraisal Institute indicating confidence in the appraisal of all types of real estate

36
Q

Net income

A

Gross income ( total revenue ) less expenses

37
Q

Opinion of value

A

An estimate of property value by a real estate broker or salesperson is not required appraisals license

38
Q

Over improve

A

An improvement that based on cost exceeds the highest and best use. For example 400,000 house built in a $200,000 neighborhood or a 50,000 kitchen that increases the value by 30,000

39
Q

Plottage

A

The process of combining two or more lots to make the resulting parcel more valuable. The increasing in value is known as a plottage

40
Q

Progression

A

An appraisal principle dealing with conformity and holes that property is increased in value when located near other properties that is of higher value example A house suraround more expensive homes

41
Q

Physical deterioration

A

A reduction in property value due to a negative change in physical conditions. Maybe curable or incurable. Could because by physical elements such as Weather or by normal usage.

42
Q

Rate of return

A

Comparison of the net income to total investment for a parcel of income property expressed as an annual percentage

43
Q

Reconciliation

A

The path of the appraisal process with the appraiser company is the most appropriate appraisal methods with all the methods used

44
Q

Regression

A

An appraisal principle dealing with Conformity that holds that property is decreased in value when located in other properties of lesser value example house surrounded by less-expensive home

45
Q

Replacement cost

A

The cost at current prices to replace a structure with the same materials. Often used as the same as reproduction cost which require similar design and materials but not the same

46
Q

Reproduction cost

A

Same as replacement cost but similar, not an exact duplication of the structure

47
Q

Scarcity

A

An appraisal principle that a reduction in the availability or supply of good will increase it’s value

48
Q

Senior residential appraisal (SRA)

A

Professional appraiser designation awarded by the appraisal Institute indicating confidence in appraisal of 1 to 4 family residence

49
Q

Square-foot approach

A

Appraisal technique of estimate course by multiplying total square footage of times a constant of cost per square foot. Example 2000 ft.² times a constant square feet equals $200,000 estimated value

50
Q

Substitution

A

Appraisal principle that holds a property’s value is determined by the cost to substitute a comparable piece of property through purchase or construction

51
Q

Supply and demand

A

Economic principle used in property appraisal that holds value is influenced by the amount of property for sale ( supply ) and the number of potential buyers ( demand)

52
Q

Tax rate

A

The rate set by the city or town which multiplied by properties assessed value will yield the property’s annual tax.

53
Q

Transferability

A

The ability to transfer the legal bundle of rights without undue restrictions

54
Q

Unit in place

A

Appraisal method of estimating replacement cost by individual components of a piece of property and adding them together to arrive at an estimate cost. Example Carpentry plus electric plus plumbing plus carpeting etc. equals total cost

55
Q

Useful life

A

The number of years a thing will last before needing replacement

56
Q

Utility

A

appraisal concept that relates to properties usefulness as a measure of value

57
Q

Value

A

What’s something is worth. The power of a good or service to command of the goods in exchange

Real Eastate (21 decks)

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