Assessment Flashcards
An opinion of value based on supportable evidence and approved methods
Appraisal
An independent professional who is trained to provide an unbiased estimate of value
Appraiser
A way to estimate value based on the present worth of the rights to future income
Income approach
The most probable price that a property should bring in a fair sale
Market value
The principle that value is created by the expectation that certain events will occur
Anticipation
The principle that no physical or economic condition remains constant
Change
The principle that value is created when a property is in harmony with its surroundings
Conformity
The principle that the value of any part of a property is measured by its effect on the value of the whole property
Contribution
The most profitable single use to which property may legally, physically, and financially be put
Highest & best use
The principle that merging or consolidating adjacent lots into a single one will produce a higher total value than the sum of the 2 sites valued separately
Plottage
The process of merging 2 separately owned lots under 1 owner
Assemblage
The principle that the worth of a better quality property is adversely affected by the presence of a nearby lesser-quality property
Regression
The principle that the maximum value of a property tends to be set by how much it would cost to purchase an equally desirable property
Substitution
The economic principle that the value of a property depends on the number of similar propertties available in the marketplace
Supply & Demand
The approach that estimates value by comparing the subject property with recently sold similar properties
Sales Comparison
An estimate of value made by determining the value of the land as if it were vacant, adding the current cost of constructing improvements, and deducting accrued depreciation
Cost Approach
A curable item in need of repair
Physical Deterioration
Depreciation caused by negative factors not on the subject property
External Obsoolescence
A loss in value due to any cause
Depreciation
The period during which a property is expected to remain useful for its original intended purpose
Economic Life
Title XI of FIRREA requires that residential property valued at $250,000 or more in a federally related transaction be appraised by a(n) ___ licensed or certified appraiser.
State
A comparative market analysis should never be represented as a(n) ___.
Appraisal
The ___ price of a property is what it actually sells for in an open market transaction.
Market Price
Cost and market value are the same. True or false?
False - cost and market value MAY BE, but are NOT ALWAYS the same
When the improvements on a property are new, cost and value are likely to be ___, provided that improvements are sought in the marketplace
equal
The ___ of a property may be affected by events that haven’t occurred yet.
Value
The ___ applies when, no matter how much money is spent on a property, the value will not keep pace with the expenditures
law of diminishing returns
According to the economic principal of ___, combining 2 adjacent lots into a large one may produce a higher total land value than the sum of the value of 2 sites if owned separately
Plottage
The economic principle of ___ holds that the maximum value of a property tends to be set by the cost of purchasing a similarly desirable property.
Substitution
Under the principle of ___, the value of any part of a property is measured by its effect on the value of the whole parcel.
Contribution
In the sales approach to value, the value of a feature that is present in the subject property but not present in a comparable property is ___ to the sales price of the comparible.
Added
CBS is… “Comp ___, ___”
Comp Better, Subtract
CPA is… “Comp ___, ___.”
Comp Poorer, Add
Physical deterioration and external obsolescence are both considered in the…
cost approach to value
___ may be curable or incurable, depending on whether the expense required to correct it contributes to the property’s value
Depreciation
Depreciation may be ___ or ___, depending on whether the expense required to correct it contributes to the property’s value
Curable or incurable
Depreciation may be curable or incurable, depending on whether…
the expense required to correct it contributes to the property’s value
External obsolescence is always ___.
Incurable
The income approach to ___ is based on the present value of the rights to future income
Value
The income approach to value is based on the…
present value of the rights to future income
If a buyer is interested in purchasing a one to four unit residential rental property, the ___ based on ___ could be used for a rough approximation of value
gross rent multiplier (GRM)
based on monthly rental income
If a buyer is interested in purchasing a one to four unit residential rental property, the gross rent multiplier (GRM) based on monthly rental income could be used for a rough approximation of ___.
Value
____ involves a detailed and professional analysis and application of the 3 approaches to value, not simply an average of the different values
Reconciliation
Debt services (mortgage payments) is not considered as an expense, so it is not included in ___.
Annual operating expenses
The art of analyzing and weighing the findings from 3 approaches to value in an appraisal is called ___.
Reconciliation
If a property improvement results in a higher value, the law of ___ applies
Increasing returns
If a property improvement results in ___, the law of increasing returns applies
higher value
The circumstances of the ___ will indicate the number of property sales that are required to serve as comps to the property being appraised.
market at the time
The circumstances of the market at the time will indicate the number of ___ that are required to serve as comps to the property being appraised.
property sales
The circumstances of the market at the time will indicate the number of property sales that are required to serve as ___ to the ___.
comps to the property being appraised
