CH1: Overview of Appraisal & RE concepts Flashcards
USPAP
Uniform Standards of Professional Appraisal Practice
Not a law
Created in 1980’s
FIRREA
Financial Institutions Reform, Recovery & Enforcement Association
passed in 1980
recognizes USPAP as current industry standard and identifies appraisal foundation as the authority for professional appraisers
Steps in Appraisal Process
- Problem identification
- Scope of work
- Applicable Data collection & analysis
- application of the approaches to value
- Reconciliation and Final opinion of Value
- Report of defined value
Valuation services vs appraisal practice
Appraisal practice - only done by appraisers
Real Property
land, things attached to the land, rights that go with ownership of the land, limitations to the use of the land
tangible property
an item that can be seen
either real or personal property
intangible property
personal property
has value, yet cannot be physically touched or seen
real estate
actual land and everything on it
real property
not only the physical land, but rights of ownership in the real estate
personal property
tangible items that usually are not permanently attached to or part of the real estate
also called chattel
annexation of property
conversion of personal property to real property - usually by attaching or affixing personal property to real property
attachments
things connected to the land both man made and natural
Fructus naturales
fruits of nature, trees and plants occurring naturally
fructus industriales
fruits of industry - plants cultivated by people
enblements
tenant farmer’s crops
doctrine of emblements
a tenant farmer is allowed to re-enter the land to harvest crops that were planted by him even after the tenancy ended
- for perennial, only applies to the first crop that matures
Trade fixtures
equipment a tenant installs for business
- always personal property
- a tenant can remove their pizza ovens, but may be liable for damages caused by removal
bundle rights
- right of use
- right of enjoyment
- right of disposal
fee simple/ fee simple absolute
greatest estate one can have
- freely transferable, inheritable and indefinite duration w/0 conditions of ownership
Land rights
- Air rights
- surface rights
- Subsurface rights
appurtenant
rights “attached to the land” - cannot be retained or sold separately from the property
riparian rights
associated with flowing water
littoral rights
non flowing water rights
appropriative rights
water rights granted by government permit and don’t depend on ownership of water rights
rule of capture
whoever drills a well on land owns all the oil or gas the well produces, even though it may have migrated from under a neighbor’s land
basements cannot be excavated without…
subsurface land rights
Value Characteristics (DUST)
Demand
Utility
Scarcity
Transferability
3 unique physical characteristics of real estate
Uniqueness
Immobility
Indestructibility
Government survey system
legal description for land, referencing principal meridians and baselines
- also called goverment rectangular survey system
- east-west = townships, parallel to baselines @ 6 mi intervals
how many sq feet is 1 acre
43,560 sq ft
how big is a parcel
5,280 across, 640 acres
Platted property
any property that has been subdivided from a large tract and referenced on a plat map
metes & bounds system
a legal description that starts at an easily identifiable point of being (POB) then describes the property’s boundaries in terms of courses or metes (compass directions) and bounds (changes in direction)
rod or pole/ chain
rod/pole = 16.5 ft or 5.5 yards chain = 66 ft or 4 rods
