Appraisal - Type of Value Flashcards
investment value
base d on client’s criteria and requirements in owning a property
Life estate termination
“goes on” interest -> remainderman “goes back or revert” -> revisionary
Life estate
freehold estate
Corporation own by more than one stock holder
ownership in severalty (one person or entity)
Estate from Period to Period (Periodic estate)
month to month
Allodial System
complete ownership of real property
Easement by necessity
property is landlocked without the easement
Easement by express reservation
owner reserved the access for himself
Easement by prescription
the use has existed over a period of time, thus implying an easement
Easement by implication
implied method through apparent long-standing use
Termination of easement
electric power company permanently remove its power lines from a utility easement, but does NOT notify the owner of the property the easement runs across
Easement vs. license
Easement - permanent right
License - revocable permission
Ground lease (land lease)
the expiration of the lease is usually related to the economic life expectancy of the structure built on it
Fee simple estate
an unconditional ownership
Annexation
conversion of personal property to real property
Value in use
the value of a particular property to a specific user at a specific point in time. Type of value can be used for schools and other properties seldom sold in the open market
Market Value
Typical buyer, typical value
The most probable sale price an informed buyer will pay on a given date, with buyer and seller being typically motivated and the property having sufficient market exposure
Book value
Financial statement value : Acquisition cost - accumulated depreciation (observing federal tax code)
Loan value
used in financing transaction and relies on an LTV for conversion from market value
Insurance value
(Replacement)Cost new - land value: insurance value is defined as the cost to replace the structure, not including the land cost
Commonly requested by individual or company who will be issuing an insurance policy
Going concern value
An appraiser might need to be competent with more than 1 asset type.
Consider the total asset tangible+ intangible to sell as one unit
Salvage value
useful components that could be removed or salvaged before demolition, can offset some cost.
Liquidation value
value sought at foreclosure
Appraisal Value
opinion (while cost and price are facts)
Market Price
amount paid for a particular property
Assessed Value
he value placed on property by a taxing authority for purposes of taxation
Change
the only constant variable in real estate
Prospective analysis
the process of using current data to estimate value into the future
Reversionary Value
what property will worth at the end of a lease term
Value - Physical Force
size
No evident for the research
cannot develop an opinion of market value
Determine Assessed Value
First thing to know MARKET VALUE (not tax rate)
Going concern
What the tangible and intangible assets would worth if they are sold as unit - ASSUMING BUSINESS will be WELL in the FUTURE
Exposure time
Standard 1-2
When exposure time is a component of the definition for the value opinion being developed, the appraiser must develop an opinion of reasonable exposure time linked to that value opinion.
Buyer not acknowledge
Sale price > Market cost and value
Value in use
An opinion of market value cannot be developed
