Appraisials Flashcards
Income or capitalization approach
Is used to appraise investment property. The appraiser estimates the present worth of future rights to the income the property generates
Market data approach
Compare recent sales of similar properties
Adjustments
Sba= subject better, add
Cbs= comparable better, subtract
Cost approach
Is used to appraise unique properties, such as a house of worship, post office, library, or hospital.
Replacement costs
Reproduction costs
Replace- $ amount to construct improvements of equal utility using current materials.
Reproduction- $ amount required to construct at exact duplicate of the subject property.
Situs
(Location) is major factor in determine the value of the property
Market price:
Cost:
Market price= actual selling price of property
Cost= is actual dollars spent to produce an asset
Principal of anticipation
Stars that the value of the property will adjust with any anticipated change within the community.
Conformity
Maximum value achieved when the property is in harmony with its surroundings
Plottage
Is the value that is created when two or more tracts of land are merged, into a single larger one.
Substitution
Is foundation for all approaches to appraising; the max price is that what u can substitute buy
Functional obsolescence
Occurs because of the absence or inadequacies of features in design or construction
Life cycle of community
Includes:
Growth, stability, decline, and gentrification or revitalization
Appraisers evaluate to see how affects value
Economic base
Reviewed for activities that will attract business and income to the investment
DUST
Four elements of value
D- demand - number of properties or goods that people r willing to buy at given price.
U-utility- a one bed vs. 3 bed.
S-sarcity- supply limited price will increase
T-transferability-good and marketable title to the property
Broker price opinion (bpo)
Licensees hired by lenders, for foreclosure, an estate sale, short sale, or refinance
