Chapter 21 - Introduction to Real Estate Appraisal Flashcards
Introduction to Real Estate Appraisal
The direct comparison approach is based on the principle of __________.
The direct comparison approach is based on the principle of substitution.
Appraisers are typically called upon to estimate objective values, which are categorized into the following:
Appraisers are typically called upon to estimate objective values, which are categorized into the following:
Answer:
insurable value, lending value, taxable value, actual value, and market value.
An estimate of the value of an interest in real property is called…
An estimate of the value of an interest in real property is called…
Answer: an appraisal (or property valuation).
Define ceiling price.
Define ceiling price.
Answer:
The ceiling price is the maximum price that a purchaser is willing to pay for a property.
The _________ method of appraisal bases the value of the subject property on the _________ of similar properties which have _____ recently.
The comparative method of appraisal bases the value of the subject property on the price of similar properties which have sold recently.
Define cost approach.
Define cost approach.
Answer:
A method of appraisal which determines the value of a property by adding the market value of the site to the cost of replacing the existing building.
Answer:
A method of appraisal which determines the value of a property by adding the market value of the site to the cost of replacing the existing building.
Highest and best use is defined as the use of land which, within all constraints (for example, zoning bylaws), will provide the maximum net return during the foreseeable future.
What is latent value?
What is latent value?
Answer:
Latent value is the value possessed by a property which has potential for redevelopment because it is currently not employed as its highest and best use.
An appraiser must understand the purpose of the appraisal assignment. A ____________ reason, for example, for expropriation or taxation purposes or a ____________ reason, such as buying, selling, leasing, or developing a property.
An appraiser must understand the purpose of the appraisal assignment. A statutory reason, for example, for expropriation or taxation purposes or a market reason, such as buying, selling, leasing, or developing a property.
When value is expressed a lump sum, it is referred to as a ____________ ____________ appraisal.
When value is expressed as a lump sum, it is referred to as a capital value appraisal.
