Chapter 8 Valuation Process Flashcards
Appraisal
An estimate of properties value by an appraiser who is usually presumed to be expert in his work
Assessed value
Evaluation placed upon property via public officer or a board as a basis for taxation
Comparative market analysis
The property evaluation that determines property value by comparing similar property sold within the last year
Cost
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)
Cost approach
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.
Depreciation
A loss of utility and thus value caused by physical deterioration, functional obsolescence or economic obsolescence or any culmination therefore.
Direct cost
The cost of labor and materials
Evaluation
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.
Income approach
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)
Indirect cost
Cost that supports construction project, such as legal or architectural fees
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 the 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 know where current market conditions, either being under duress
Mortgage value
The estimate worth of a particular asset which established for the purposes of obtaining financing secured against the asset
Obsolescence
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.
Functional obsolescence
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
Economic obsolescence
A loss in value caused by influences external to the property such as increasing industrial activity near residential neighborhood
Price
The amount the purchaser agrees to pay in arm’s-length transaction
Sales comparison approach
Valuation method which compares the subject properties characteristics with those of comparable properties which have recently sold in similar transactions.
Valuation
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
Value-in-rise
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
The cost of labor and materials is also referred to as what?
Hard cost
An appraisal is used in determining the value of what
Insurable value
Liquidation value
Investment value
Reproduction cost is equal to what
The cost of rebuilding the subject property in its current condition
Which of the following property touch most likely use a value in use value when conducting an appraisal?
School
What must be determined first before property can be value in income approach?
Net operating income
Site is always valued as if it is?
Unimproved
What is the first order of adjustments, when conducting the sales comparison appraisal?
Analyze any rights conveyed
Which of the following is an approach used by appraisers to determine the value of the property?
- Cost approach
- Income approach
- Sales comparison approach
When trying to estimate market value, how far back should sales be researched?
3 months-1 year
What is not the role of a sales person?
They must be able to accurately value a property
What must in appraiser do before two properties can be compared?
Find a common unit of comparison
Plottage
Assemblage of lots, various lots or plots of land for development purpose
