Appraisal and Land Use

Question 1

Subdivision

Answer 1

A plot of land divided into smaller portions for the purpose of building

Question 2

Functional Utility

Answer 2

The combined factors of usefulness with desirability.

Question 3

Cul-de-Sac Lot

Answer 3

A lot on a dead-end street

Question 4

Fiscal Year

Answer 4

A year as reckoned for taxing or accounting purposes

Question 5

Assemblage

Answer 5

Putting several smaller, less valuable parcels together under one ownership to increase value of total property

Question 6

Cost

Answer 6

Represents expenses in money, labor, material, or sacrifices in acquiring or producing something

Question 7

Book Value

Answer 7

The initial cost of the property plus capital improvements and minus the total accrued depreciation

Question 8

Scarcity

Answer 8

Less availability of a commodity in the marketplace resulting in increased value when demand exceeds supply.

Question 9

Market Value

Answer 9

The price the property would bring if freely offered on the open market with both a willing buyer and a willing seller

Question 10

Net Income

Answer 10

Sometimes known as net operating income. The remaining income after operating expensed have been subtracted from the gross income of a property

Question 11

Corner Lot

Answer 11

A lot found at the intersection of two streets

Question 12

Appreciation

Answer 12

An increase in value

Question 13

Deferred Maintenance

Answer 13

Negligent care of a building

Question 14

Sales Comparison Approach

Answer 14

An appraisal method using the principles of substitution to compare similar properties

Question 15

Transferability

Answer 15

The ability to transfer ownership of an item from one person or entity to another.

Question 16

Economic Life

Answer 16

The estimated period over which an improved property may be profitably used to yield a return

Question 17

Front Footage

Answer 17

The width of a property along the street

Question 18

Cost Approach

Answer 18

An appraisal method that estimates replacement cost of the improvements, deducts estimated accrued depreciation, and then adds market value of the land.

Question 19

Income approach

Answer 19

A method of appraising property based on the property’s anticipated future income.

Question 20

Accrued Depreciation

Answer 20

The difference between the cost to replace the property and the property’s current appraised value

Question 21

Operating expenses

Answer 21

Expenditures necessary to the operation of an income-producing building

Question 22

Gross Rent

Answer 22

Income (figured annually) received from rental units before any expenses are deducted

Question 23

Depriciation

Answer 23

Loss in value from any cause

Question 24

Capital Improvements

Answer 24

Any permanent improvement made to real estate for the purpose of increasing the useful life of the property or increasing the property’s value

Question 25

Principle of Anticipation

Answer 25

The market anticipates the future benefits that are to be derived from the property.

Question 26

Comps

Answer 26

A term used by real estate agents and appraisers to mean comparable properties

Question 27

Variance

Answer 27

An exception granted to existing zoning regulations for special reasons

Question 28

Appraisal

Answer 28

An act or process of developing an opinion of value.

Question 29

Supply

Answer 29

The total amount of an item that is for sale or lease, at various prices, at any given point in time.

Question 30

Gross income multiplier (GIM)

Answer 30

A figure which, when multiplied by the annual gross income from all sources, not just annual rent, equals the property’s market value.

Question 31

Gross rent multiplier (GRM)

Answer 31

A figure which, when multiplied by the monthly rental income, equals the property’s market value.

Question 32

Demand

Answer 32

The desire to buy or obtain a commodity

Question 33

Cap Rate

Answer 33

A term sometimes used to refer to capitalization rate

Question 34

Utility Value

Answer 34

The usefulness of the property

Question 35

Environmental Impact Report

Answer 35

A study of how a development will affect the ecology of its surroundings

Question 36

Improvement

Answer 36

Any buildings or structures on a lot

Question 37

Effective Age

Answer 37

The years or age shown by the condition and utility of a structure, rather than its actual or chronological age

Question 38

Calendar Year

Answer 38

This starts on January 1 and continues through December 31 of the same year.

Question 39

Actual Depreciation

Answer 39

That depreciation occurring as a result of physical, functional, or economic forces that cause loss in value to a building

Question 40

Market Rent

Answer 40

The rent a property should bring in the open market

Question 41

Effective Gross Income

Answer 41

The anticipated income resulting from estimated potential gross income from a rental property less an allowance for vacancy and bad debts

Question 42

"DUST"

Answer 42

The 4 elements that create value: Demand, Utility, Scarcity, Transerability

Question 43

Assessed Value

Answer 43

Value placed on property by a public tax assessor as a basis for taxation.

Question 44

Contract Rent

Answer 44

The amount of rental income due from the tenant as agreed in the lease agreement

Question 45

Price

Answer 45

What is paid for something

Question 46

Eminent Domain

Answer 46

The right of the government to take private property from the owner, for public use, and paying for the fair market value

Question 47

Actual Age

Answer 47

The real age of a building

Question 48

Condemnation

Answer 48

A common name for eminent domain, or the right of the government to take private property from an owner for public use, paying fair market value

Question 49

Reproduction Cost

Answer 49

The current cost of building a replica of the subject structure using similar quality materials; refers to exact duplication of the buildings; usually costs more than replacement costs

Question 50

Economic age

Answer 50

Age of a building determined by its condition and usefulness.

Question 51

Value

Answer 51

The power of goods or services to command other goods in exchange for the present worth of future benefits arising from ownership

Question 52

Vacancy Factor

Answer 52

Lost income because of a vacant unit

Question 53

Ad Valorem

Answer 53

A Latin prefix meaning according to value. Local governments levy real property tax based on the assessed value. Property taxes are unknown as ad valorem taxes.

Question 54

Principle of Substitution

Answer 54

The market value of a property is affected by the cost of obtaining an equally desirable and valuable property as a substitute.

Question 55

Effective Demand

Answer 55

The desire coupled with purchasing power.

Question 56

Accrued

Answer 56

Accumulated over a period of time

Question 57

Replacement Cost

Answer 57

The cost of replacing improvements with modern materials and techniques

Question 58

Appraisal Report

Answer 58

A written report setting forth an appraiser's estimates of value of a subject property

Question 59

Capitalization

Answer 59

The process of calculating the present worth of a property on the basis of its capacity to continue to produce an income stream

Question 60

Reconciliation

Answer 60

Sometimes called correlation, this is the adjustment process of weighing the results of all three appraisal methods to arrive at a final estimate of market value for the subject property.