Chapter 8 Valuation Process

Question 1

Appraisal

Answer 1

An estimate of properties value by an appraiser who is usually presumed to be expert in his work

Question 2

Assessed value

Answer 2

Evaluation placed upon property via public officer or a board as a basis for taxation

Question 3

Comparative market analysis

Answer 3

The property evaluation that determines property value by comparing similar property sold within the last year

Question 4

Cost

Answer 4

The total dollar expenditure for labor materials legal services architectural design financing Texas during construction interest contractors overhead and profit and entrepreneurial overhead and profit (may or may not equal value)

Question 5

Cost approach

Answer 5

A method of estimating the value of real property by calculating a current construction cost, subtracting the cured depreciation and adding a Linville you obtained from the market. This method works best with improvements are relatively new estimates of depreciation us more likely to be accurate.

Question 6

Depreciation

Answer 6

A loss of utility and thus value caused by physical deterioration, functional obsolescence or economic obsolescence or any culmination therefore.

Question 7

Direct cost

Answer 7

The cost of labor and materials

Question 8

Evaluation

Answer 8

The study of the nature, quality, or utility of certain property interests in which a value estimate is not necessarily requires, e.g. Highest and best value, feasibility, market supply and demand, etc.

Question 9

Income approach

Answer 9

An appraisal technique whereby the value of an income producing property is estimating by capitalizing it’s net operating income using an appropriate capitalization rate. Value = income/rate (tax.ny.gov-glossary)

Question 10

Indirect cost

Answer 10

Cost that supports construction project, such as legal or architectural fees

Question 11

Investment value

Answer 11

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

Question 12

Market price

Answer 12

The actual selling price of the property

Question 13

Market value

Answer 13

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 know where current market conditions, either being under duress

Question 14

Mortgage value

Answer 14

The estimate worth of a particular asset which established for the purposes of obtaining financing secured against the asset

Question 15

Obsolescence

Answer 15

One of the causes of depreciation. It is the loss of desirability and usefulness cause my new inventions, changes in design, and improve processes for production, or from the influence of external factors. Obsolescence maybe either economic or functional.

Question 16

Functional obsolescence

Answer 16

Impairment of useful capacity for efficiency loss of value cause but super adequacy or in adequacy or changes in our property itself not to be confused with external obsolescence. Parable of the cost to cure is justified by the resulting increase in value of the property otherwise incurable

Question 17

Economic obsolescence

Answer 17

A loss in value caused by influences external to the property such as increasing industrial activity near residential neighborhood

Question 18

Price

Answer 18

The amount the purchaser agrees to pay in arm’s-length transaction

Question 19

Sales comparison approach

Answer 19

Valuation method which compares the subject properties characteristics with those of comparable properties which have recently sold in similar transactions.

Question 20

Valuation

Answer 20

The process of value, investment value, insurable value, or other property to find value of an identified interest or interests in a specific parcel of parcels of real property as of a given date

Question 21

Value-in-rise

Answer 21

The net present value NPV of a cash flow or other benefits that an asset )real property) generates for specific on her under specific use

Question 22

The cost of labor and materials is also referred to as what?

Answer 22

Hard cost

Question 23

An appraisal is used in determining the value of what

Answer 23

Insurable value
Liquidation value
Investment value

Question 24

Reproduction cost is equal to what

Answer 24

The cost of rebuilding the subject property in its current condition

Question 25

Which of the following property touch most likely use a value in use value when conducting an appraisal?

Answer 25

School

Question 26

What must be determined first before property can be value in income approach?

Answer 26

Net operating income

Question 27

Site is always valued as if it is?

Answer 27

Unimproved

Question 28

What is the first order of adjustments, when conducting the sales comparison appraisal?

Answer 28

Analyze any rights conveyed

Question 29

Which of the following is an approach used by appraisers to determine the value of the property?

Answer 29

1. Cost approach
2. Income approach
3. Sales comparison approach

Question 30

When trying to estimate market value, how far back should sales be researched?

Answer 30

3 months-1 year

Question 31

What is not the role of a sales person?

Answer 31

They must be able to accurately value a property

Question 32

What must in appraiser do before two properties can be compared?

Answer 32

Find a common unit of comparison

Question 33

Plottage

Answer 33

Assemblage of lots, various lots or plots of land for development purpose