chapter 16 Appraisal Flashcards
analysis of income, including rental and other factors
Gross Income multiplier (GIM)
analysis of rental income, used roughly in a sales comparison approach
Gross rental multiplier (GRM)
use of land that yields the most money
highest and best use
appraisal technique that analyzes the cost to build
Cost approach
analysis of value of property using return on investment
Income approach
extra that contributes to owner satisfaction: clean air, view and so on
Amenity
lost of value due to any cause
Depreciation
loss of value due to factors beyond the property boundaries
External or Economic obsolescence
loss of value due to worn or outmoded features (old- fashion) features
functional obsolescence
process of estimating value
Appraisal
rate of return demanded by investors in a particular area
Capitalization Rate (Income gain)
similar nearby property recently sold (Compare)
comparables
an independent person trained to provide an unbiased estimate of value
Appraiser
analysis of values received by different appraisals approach
Reconciliation
cost to rebuild exactly, using material like the original
Reproduction cost
cost to rebuild using today’s materials and techniques
Replacement cost
what a property actually sells for
Market price
location, buyers willing to pay more for certain locations
Situs
loss of value due to wear and tear
physical deterioration
parcel of real estate being appraised
Subject property
present worth of future benefits
Value
price that would be paid by an informed buyer
Market value
principle that no one pays more if the same can be had for less
Substitution
appraisal technique that analyzes sale prices of comparable properties
Sales Comparison Approach
