Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

GA Real Estate Terms > Chapter 12 > Flashcards

Chapter 12 Flashcards

1
Q

4-3-2-1 Rule

A

A method of estimating the value of lots with more than standard depth; a depth table

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Accrual for depreciation

A

A process for recovery of investment in a building also called return of investment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Accrued depreciation

A

Past depreciation; the actual depreciation in a property that has already occurred as of a given date

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Actual age

A

The number of years of building has been in existence

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Adjusted sales price

A

The price put on a comparable property after adjustments have been made for differences between it and the subject property

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Age-life

A

A method of estimating accrued depreciation; also called straight line depreciation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Amenities

A

Intangible benefits to be derived from property ownership, such as Pleasant view, conditions that are pleasant and agreeable for enjoyable living and a beneficial influence arising from a property‘s location

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Principle of anticipation

A

Holds that value is based upon the future benefits to be derive from property ownership

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Appraisal

A

An estimate or opinion of value made by a qualified person

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Appraisal process

A

Systematic procedures used by an appraiser to gather and analyze data in order to arrive at a final conclusion of value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Appraiser

A

A person qualified by experience, education, and licensing to make estimates of value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Appreciation

A

Increase in value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Assemblage

A

The process of combining several individually owned adjoining (contagious) lots into one large track owned by one person

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Comparables

A

Properties with similar characteristics to the subject property used for analysis in the market data approach

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

Contiguous

A

Adjoining, next to, an actual contact, with

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Correlation

A

Also called reconciliation

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

Cost

A

A historical record of past expenditure necessary to bring a property into being

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

Cost approach

A

One of the three approaches to value; it involves estimating the current cost of replacing all improvements, from which the amount of estimated accrued depreciation is deducted, and an estimated value of the land is added

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Cost-to-cure

A

A method of estimating accrued depreciation by calculating the cost to correct all curable depreciation; also called observed condition

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Curable depreciation

A

Items of physical deterioration in functional obsolescence within owners control, which are economically feasible to repair or replace

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Debt service

A

Mortgage payments including principal and interest

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

Depreciation

A

Lost in value due to physical deterioration, functional obsolescence, or economic obsolescence

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

Depth tables

A

Method of estimating the value of the added depth of a lot, as compared to a standard size lot

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

Expense ratio

A

Total expenses divided by the effect of gross income

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

Front foot

A

One linear foot on a lots boundary line along a street, highway, or body of water

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

Economic life

A

The period of time over which a property is estimated to be profitable or utilized; also called useful life

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

Economic obsolescence

A

Loss in value due to adverse conditions external to the property and therefore, beyond the owners control; also called social, locational, or environmental obsolescence

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

Effective age

A

A property‘s age based upon its condition and appearance; maybe more, the same, or less than it’s actual age

29
Q

Effective gross income

A

The actual gross income a property is expected to produce; determined by projecting a property‘s potential grows income and then making allowances for variances and collecting losses

30
Q

Functional obsolescence

A

Lawson value due to improvements there are in adequate, super and adequate, or improperly designed for today’s needs

31
Q

Gross rent multiplier

A

A number that, when multiplied by properties estimated gross rent, produces an indication of the properties value

32
Q

Highest and best use

A

That use of a property which will yield the greatest return on the property or greatest current value; the most profitable use to which a property is adapted

33
Q

Income approach

A

One of three approaches to value; it converts the properties net operating income into an indication of value; also called capitalization

34
Q

Incurable depreciation

A

Items of economic obsolescence (sometimes physical deterioration or functional obsolescence) which are beyond the owners control or which cannot be justified by the anticipated increase in value; not economically feasible to correct

35
Q

Key lot

A

One that joins the rear of a corner lot. For residential use, such lots are not desirable because of the view of the neighbors backyard. For commercial use, a key lot can be advantageous because of its importance in an attempt to assemble several lots under one ownership, assemblage

36
Q

Market price

A

The amount for which a property actually sells

37
Q

Market value

A

The price of property would be expected to bring in the open market under normal conditions

38
Q

Narrative report

A

An appraisal report summarizing all data, techniques, and appraisal methods used to arrive at a final conclusion of value; the most complete appraisal report supported with such documents as maps, photographs, charts, plat, floorplans, or contracts.

39
Q

Neighborhood analysis

A

An analysis of a homogeneous grouping of individuals or businesses, as part of an appraisal, to determine the effect on the subject property of such factors as: growth, stability or decline of the neighborhood or physical, economic, governmental and social forces at work

40
Q

Net operating income

A

A property’s income after all operating expenses have been paid; the income used and the income approach to estimating value

41
Q

Observed condition

A

Also called cost-to-cure

42
Q

Operating expenses

A

Those expenses which are necessary to maintain a property’s production of income

43
Q

Orientation

A

Placement of improvements in relation to the positive and negative features of a lot

44
Q

Over improvement

A

An improvement which is not the highest and best use for the site on which it is placed due to excessive cost or size

45
Q

Percolation

A

The ability for soil to absorb water. Percolation tests are made to determine the rate of absorption when a septic system is to be used on a lot

46
Q

Physical deterioration

A

Physical deterioration occurs because of normal wear and tear, by exposure to the elements, or by lack of proper maintenance. Also called deterioration

47
Q

Plat

A

A map showing how a property is subdivided into lots

48
Q

Plottage

A

An increase in value brought about by the process of assemblage; the result of combining several lots under one ownership, so that’s a large track has more utility in value than some of the lots owned individually. Also called plottage increment

49
Q

Potential gross income

A

The expected rental income from a property based upon full occupancy for an entire year

50
Q

Pro forma statement

A

A projected annual operating statement which forecast gross income, operating expenses, and net operating income

51
Q

Quantity survey

A

A method of estimating the current cost of reconstructing an improvement using a detailed breakdown of all labor, materials services, profit and other overhead

52
Q

Recapture

A

Also called return of investment

53
Q

Reconciliation

A

The final step in arriving at a final estimate of value. The procedure involves assigning each approach a weighting factor based on the appraisers judgment as to which approach is the most relevant in valuing the property. Also used in the market data approach and in the girls rent multiplier.

54
Q

Replacement cost

A

The current cost of replacing a property with one of similar utility, using modern materials, equipment, and construction methods

55
Q

Reproduction cost

A

The current cost of constructing an exact replica of the subject property using the same or similar materials

56
Q

Reserve for replacement

A

Money set aside each year for the replacement of items that have a useful life of more than one year, such as furniture appliances, carpet, heating systems, air-conditioning systems, or roof

57
Q

Return of investment

A

The recovery of an investment in a building which compensates the owner for loss due to depreciation that occurs over the economic life of the building also called recapture or accruel for depreciation

58
Q

Return on investment

A

The profit or interest earned on an investment

59
Q

Sales comparison approach

A

One of three approaches to value; it compares recently sold properties with similar characteristics to the subject property

60
Q

Straight line depreciation

A

A method of measuring depreciation, either past or future, as occurring in equal amounts each year over the useful life of the building; frequently used because of ease of application

61
Q

Subject property

A

The property that is being appraised

62
Q

Principle of substitution

A

Holds that a property‘s maximum value tends to be set by the cost of purchasing an equally desirable substitute, provided the substitution can be made conveniently and without the lay

63
Q

Unearned increment

A

An increase in value due to no effort on the part of the owner

64
Q

Unit-in-place

A

A method of estimating the current cost of reconstructing an improvement by estimating the cost of each component part (foundation, walls, roof, heating system, etc) in one place

65
Q

Utility

A

The ability of a property to fill a need or create a desire

66
Q

Utility value

A

Value to an owner or user of property; a subjective value based upon the ability to use or enjoy a property

67
Q

Value

A

The amount of property will bring on the open market

68
Q

Yield

A

The interest earned by an investor on the investment; also called return

GA Real Estate Terms (11 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions