Chapter 12 notes (value) Flashcards
Prerequisites to Value
D.U.S.T
Demand
Utility
Scarcity
Transferability
Types of Value
Assessed value Condemnation Going Concern Insured value Investment value Liquidation value Salvage value
Appraisal process
- Define the problem
- Make preliminary study,
- Gather data (general data, specific data.)
- Analyze data
- reconciliation final estimate.
- prepare appraisal report,
Factors influencing value
Location (situs), size and shape, depth tables, soil characteristics, key lots, assemblage
Plottage
an increase in value resulting from assemblage.
Assemblage
The process of combing several individually owned adjoining parcels into one tract.
General Data used to appraise a property
(PEGS) Physical factors, Economic Governmental Social
Data pertaining to subject property
Highest and best use, site characteristics, improvements, comparable sales, rentals, expenses, income (for investors)
The above grade, heated, enclosed, and finished area of a property
Gross Living Area (GLA)
Three approaches to analyze data (pertaining to appraisal report)
sales comparison approach
Cost/replacement approach
Income/Capitalization approach
3 types of appraisal reports
letter of opinion, short form (lending institutions, most common), narrative (most comprehensive. used for commercial)
see page 12-15
Sales comparison/market data approach
Adjustments made for:
Rights, conditions of sale, financing, market conditions, location, physical factors, income characteristics.
C.I.A.
When the comp property is inferior to the subject property.
Comparable Inferior, Add
(Never make adjustments to the subject property. )
C.B.S
Comparable Better, Subtract
When the comp property is superior to the subject property.
___ establishes the procedure for a competent appraisal through the USPAP
The appraisal standards board
