Appraisal Process Flashcards
The Valuation Process
- Identification of the problem
- Scope of work determination
- data collection and property description
- Data Analysis
- Land Value opinion
- Application of the approaches to value
- Reconciliation of value indicators
- Report of defined value
Market Analysis
the study of the supply and demand in a specific area for a specific type of property
Highest and Best Use
the reasonably probable use of property that results in the highest value
HABU 4 Tests
- legally permissible
- Physically Possible
- financially feasible
- maximally productive
HABU analysis 3 step process
- determine HABU as vacant
- Determine HABU as improved
- Determine as either.
Questions we must always ask for HABU
- Leave as is?
- Modify?
- Demo?
Consistent use
the concept that land cannot be valued on the basis of one use while the improvements are valued on the basis of another use
Sales Comparison Approach
sales of similar properties are compared to the subject to arrive at an indication of value
Comparable Data
Near in time, located near property, and alike
Arms length transaction
transaction between unrelated parties who are each acting in his or her own best interest
Primary Data
Information confirmed directly with someone directly involved in the transaction
Secondary Data
MLS, brokers..
Gross Rent Multiplier
The relationship or ratio between the sale price or value of a property and its periodic gross rental income.
Monthly GRM
Sales price / Monthly Rent
Quantitative
quantified; numbers
