Chapter 2 Flashcards
How to find improved land value:
Sale Price - Value of Imrovements= Extracted Land Value
Land residual technique
This procedure requires the appraiser to separate the rent between the
improved land and the building improvements
Ground rent capitalization
values real estate by looking at the rental income that a property is anticipated to generate
Subdivision development analysis
The appraiser analyzes the unimproved (undeveloped) land as if it
were subdivided, improved (developed), and sold
Cost approach
a valuation method that estimates the value of a property by summing up construction costs and the land value, minus depreciation
Sales comparison approach
an appraisal method used to determine the value of a property by comparing it to similar properties recently sold in the area with similar characteristics.
Income capitalization approach
estimate the value of a property based on the income it generates
Extraction (formula)
Sales price - depreciated cost of improvements = an estimated sale price for the land
Allocation
collect information on the value of comparable sales and establishes a ratio between the site value and the total value. The ratio is then applied to the subject property
T/F: The first two assignment elements of problem identification
are identifying the real estate and the real property rights to
be appraised
false
T/F: Comparable sales having a different highest and best use
than the subject should be used if similar in other relevant
characteristics
false
T/F: Non-realty components of value are an element of comparison
considered within the sales comparison approach
True
T/F: Extraction is an improved land valuation procedure that
can be used when a property sells and includes building
improvements on the site
True
T/F: The final step in the valuation process is the reconciliation of
the value indications
false
T/F: An appraiser must use all three approaches in every assignment
false
