Chapter 20 Review: Appraisal Flashcards
The definition of _____ value is the highest value that a property will bring in a competitive open market
market
“Highest and best use” of a property is that which preserves its utility and yields a net income flow that forms the highest present
value of the land
Forces that contribute to value are:
Economic
Social
Governmental
Physical
Economic principles that affect value are:
Utility Transferability Supply and Demand Anticipation Contribution Substitution Conformity Change Competition Assemblage and Plottage Regression and Progression Low of Increasing and Decreasing Returns
The three approaches to value are:
Market
Cost
Income
The market approach is used to appraise
single-family homes and vacant land
Two houses build the same year may vary widely in _______ ___ depending on the level of maintenance each has received and how each was constructed
effective age
An appraiser reconciles data from the three approaches to develop an opinion of
value
Improvements can be depreciated for tax purposes; ____ cannot be depreciated
land
A loss in value is known as
depreciation
Normal wear and tear causes _______obsolescence; an example would be a porch in poor condition
physical
Poor design causes _______ obsolescence; an example is a house with all bedrooms on the second floor and the only bathroom on the first floor
functional
Negative factors outside the property cause ______ obsolescence; an example is that a major employer shuts down and the city loses thousands of jobs
external
The economic life a building is a measurement of its ________. The appraiser uses this information to compute depreciation
useful life
