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Real Estate > Appraisal and Land Use > Flashcards

Appraisal and Land Use Flashcards

1
Q

Environmental Impact Report

A

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

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2
Q

Cost Approach

A

Appraisal Method - estimates replacement cost of the improvements, deducts estimated accrued depreciation and then adds market value of the land

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3
Q

Front Footage

A

Width of a property along the street

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4
Q

Net Income

A

NOI - remaining income after operating expensed have been subtracted from the gross income of a property

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5
Q

Ad Valorem

A

Latin for according to value - Local governments levy real property tax based on the assessed value.

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6
Q

Property taxes are known as what type of tax?

A

Ad valorem taxes

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7
Q

Cost

A

Expenses in money, labor, material or sacrifices in acquiring or producing something

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8
Q

Appreciation

A

Increase in value

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9
Q

Demand

A

the desire to buy or obtain a commodity

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10
Q

Reproduction Cost

A

Current cost of building a replica of the subject structure using similar quality materials - exact duplication of the buildings

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11
Q

Which costs more - reproduction or replacement costs?

A

Reproduction

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12
Q

Contract Rent

A

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

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13
Q

Calendar Year

A

Jan 1 - Dec 31

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14
Q

Assessed Value

A

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

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15
Q

Deferred Maintenance

A

Negligent care of a building

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16
Q

Corner Lot

A

Lot found at the intersection of 2 streets

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17
Q

Cap Rate

A

Capitalization Rate

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18
Q

Appraisal Report

A

Written report setting forth an appraiser’s estimates of value of a subject property

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19
Q

Transferability

A

Ability to transfer ownership of an item from one person or entity to another

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20
Q

Fiscal Year

A

a year as reckoned for taxing or accounting purposes

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21
Q

Vacancy Factor

A

Lost income because of a vacant unit

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22
Q

“DUST”

A

4 elements that create value - Demand, Utility, Scarcity and Transferability

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23
Q

Assemblage

A

Putting several smaller, less valuable parcels together under 1 ownership to increase value of total property

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24
Q

Economic Age

A

Age of a building determined by its condition and usefulness

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25
Q

Supply

A

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

26
Q

Capital Improvements

A

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

27
Q

Effective Demand

A

Desire coupled with purchasing power

28
Q

Value

A

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

29
Q

Sales Comparison Approach

A

Appraisal Method - using the principles of substitution to compare similar properties

30
Q

Accrued

A

Accumulated over a period of time

31
Q

Reconciliation

A

AKA correlation - adjustment process of weighing the results of all 3 appraisal methods to arrive at a final estimate of market value for the subject property

32
Q

Appraisal

A

Act or process of developing an opinion of value

33
Q

Income Approach

A

Appraisal Method - based on the property’s anticipated future income

34
Q

Gross Rent

A

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

35
Q

Capitalization

A

Process of calculating the present worth of a property on the basis of its capacity to continue to product an income stream

36
Q

Price

A

What is paid for something

37
Q

Scarcity

A

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

38
Q

Eminent Domain

A

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

39
Q

Economic Life

A

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

40
Q

Comp

A

comparable properties

41
Q

Market Value

A

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

42
Q

Depreciation

A

Loss in value from any cause

43
Q

Variance

A

Exception granted to existing zoning regulations for special reasons

44
Q

Principal of Anticipation

A

Market anticipates the future benefits that are to be derived from the property

45
Q

Cul-de-sac Lot

A

Lot on a dead end street

46
Q

Utility Value

A

Usefulness of the property

47
Q

Functional Utility

A

Combined factors of usefulness with desirability

48
Q

Improvements

A

Any buildings or structures on a lot

49
Q

Effective Gross Income

A

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

50
Q

Operating Expenses

A

Expenditures necessary to the operation of an income-producing building

51
Q

Effective Age

A

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

52
Q

Book Value

A

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

53
Q

Actual age

A

Real age of a building

54
Q

Condemnation is a common name for what?

A

Eminent Domain

55
Q

Replacement Cost

A

Cost of replacing improvements with modern materials and techniques

56
Q

Actual Depreciation

A

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

57
Q

Subdivision

A

Plot of land divided into smaller portions for the purpose of building

58
Q

Gross Rent Multiplier (GRM)

A

Figure which, when multiplied by the monthly rental income, equals the property’s market value

59
Q

Accrued Depreciation

A

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

60
Q

Gross Income Multiplier (GIM)

A

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

61
Q

Principle of Substitution

A

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

62
Q

Market Rent

A

Rent a property should bring in the open market

Real Estate (19 decks)

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