Chapter 8. Flashcards
Assessed Value
A valuation placed upon property by a public officer or a board, as a basis for taxation.
Comparative Market Analysis
A property evaluation that determines property value by comparing similar properties sold within the last year.
Cost
The total dollar expenditure(ხარჯი) for labor, materials, legal services, architectural design, financing, taxes during construction, interest, contractor’s overhead and profit, and entrepreneurial overhead and profit (may or may not equal value).
Cost Approach
A method of estimating the value of real property by calculating a current construction cost, subtracting ( გამოკლება) accrued ( წარმოშობა) depreciation and adding a land value obtained from the market. This method works best when the improvements are relatively new and estimates of depreciation are thus more likely to be accurate.
Depreciation
A loss of utility and thus value caused by physical deterioration, functional obsolescence or economic obsolescence or any combination thereof.
Direct Cost
The cost of labor and materials.
Evaluation
A study of the nature, quality, or utility of certain property interests in which a value estimate is not necessarily required, e.g. highest and best use, feasibility, market supply and demand, etc.
Income Approach
An appraisal technique whereby the value of an income producing property is estimating by capitalizing its net operating income using an appropriate capitalization rate. Value = Income / Rate. (tax.ny.gov - glossary)
Indirect Cost
Costs that support a construction project, such as legal or architectural fees.
Insured Value
The value of an asset or asset group that is covered by an insurance policy; can be estimated by deducting cost of noninsurable items (e.g. land value) from market value.
Investment Value
The specific value of an investment to a particular investor or class of investors based on individual investment requirements; distinguished from market value, which is impersonal and detached.
Market Price
The actual selling price of a property.
Market Value
The most probable price that a property should bring if exposed for sale in the open market for a reasonable period of time, with both the buyer and seller aware of current market conditions, neither being under duress.
Mortgage Value
The estimate worth of a particular asset which is established for the purposes of obtaining financing secured against that asset.
Obsolescence
One of the causes of depreciation. It is the loss of desirability and usefulness caused by new inventions, changes in design, and improved processes for production, or from the influence of external factors. Obsolescence may be either economic or functional.
Functional Obsolescence
Impairment of useful capacity or efficiency; loss of value caused by super adequacy, inadequacy or changes in the art inherent in the property itself. not to be confused with external effects of economic obsolescence. Curable if the cost to cure is justified by the resulting increase in value of the property; otherwise incurable.
Economic Obsolescence
A loss in value caused by influences external to the property such as increasing industrial activity near a residential neighborhood.
Plottage
Increment in unity value of a plot of land created by assembling smaller ownerships into one ownership
Price
The amount a purchaser agrees to pay and a seller agrees to accept in an arms length transaction
Sales Comparison Approach
Valuation method which compares a subject property’s characteristics with those of comparable properties which have recently sold in similar transactions.
Valuation
The process of estimating market value, investment value, insurable value, or other properly defined value of an identified interest or interests in a specific parcel or parcels of real property as of a given date.
Value-in-Use
The net present value (NPV) of a cash flow or other benefits that an asset (real property) generates for a specific owner under a specific use.
An estimate of a property’s value by an appraiser who is usually presumed to be an expert in his work is known as what…?
Appraisal
The actual selling price of a property is referred to as what…?
Market Price
Which of the following property types will most likely use a value-in-use value when conducting an appraisal…
School
A commercial property will most likely yield what type of value by an appraiser…?
Investment Value
Which of the following is used when analyzing the highest and best use of a property…?
Evaluation
