Course V Flashcards
Location, Economic Trends and Factors, Date of sale physical characteristics, Condition of sale
Elements of comparison
calculated from the market.
Sales comparison Approach
Total Economic Life
Total period of time that the improvements contributes value to the property (TEL) Formula: REL+EFF=TEL
a loss in utility and value from ANY CAUSE
Depreciation
The process of finding intermediate terms or numbers in a sequence of terms or numbers
Interpolation
Design deficiency that is not economically feasible to remedy.
Functional Obsolescence incurable
Square ft./cubic ft. method
(Total gross living area) must be careful to compare houses of similar type of construction.
Conformity
Homogeneity terms; retirement community with deed restrictions and similar size houses.
Quantity Survey Method
The most detailed and most precise method of cost estimating. (Used by contractor’s not mass app)
Value of lessor object enhance by value of better object
Progression & Regression
Sales comparison Approach
calculated from the market.
Homogeneity terms; retirement community with deed restrictions and similar size houses.
Conformity
The combining of property for greater utility and greater value
Plottage
Observed condition
most detailed method that breaks down depreciation into all components (curable & incurable)
Plottage
The combining of property for greater utility and greater value
FMV
Knowledgeable buyer willing seller arms length transaction.
Employs the elements of the Cost approach it involves subtracting out the cost of improvements what is leftover is the land value
Abstraction method
Remaining Economic Life
Period of time from the date of appraisal to the end of the improvements economic life (REL)
Based on the principle of SUBSTITUTION; most important of all evaluation principles.
Market Approach
Straight line depreciation with extra
Modified age/life
Actual age
Number of years lapsed since the original structure was built (chronological or historical age).
most detailed method that breaks down depreciation into all components (curable & incurable)
Observed condition
Elements for land valuation
Front foot, square foot, acre and section, site, units buildable
Functional obsolescence curable
design deficiency that can be replaced or redesigned at a relatively low cost.
Elements of comparison
Location, Economic Trends and Factors, Date of sale physical characteristics, Condition of sale
Separating a comparable sale into its components part
Allocation method
Value created by future benefits.
Anticipation
Factored Historical Cost Method
Applies an index or trend factor to a previous value from an appropriate construction cost index.
Income earned by the land. What is leftover after labor, management and capital has been paid.
Surplus Productivity
Balance
Proper mix of types and uses of properties
Forces that affect market
Change
Progression & Regression
Value of lessor object enhance by value of better object
Detailed age-life method that can be used in quantity survey and unit in place cost method. Each building component is depreciated separately.
Engineering breakdown
Substitution
Pay no more for real estate when you can buy equal for less.
Allocation method
Separating a comparable sale into its components part
Assemblage
Merging of adjacent properties into one of common ownership or use.
(Total gross living area) must be careful to compare houses of similar type of construction.
Square ft./cubic ft. method
Unit-In-Place
Method-Breaks the cost down into components of work done by subcontractors using workable units such as sq. foot, linear foot, and other units.
Consistent use
Transition; value land building the same; McDonald’s buy lot with house on it. Build commercial structure.
Engineering breakdown
Detailed age-life method that can be used in quantity survey and unit in place cost method. Each building component is depreciated separately.
Transition; value land building the same; McDonald’s buy lot with house on it. Build commercial structure.
Consistent use
The most detailed and most precise method of cost estimating. (Used by contractor’s not mass app)
Quantity Survey Method
Number of years lapsed since the original structure was built (chronological or historical age).
Actual age
Merging of adjacent properties into one of common ownership or use.
Assemblage
Competition
Profit tends to breed competition and excel profit tends to breed ruinous competition.
Capitalizes net income into value
Income
(Manure Theory) once you get too much you start to loose the value.
Increasing and Decreasing returns
Period of time from the date of appraisal to the end of the improvements economic life (REL)
Remaining Economic Life
Surplus Productivity
Income earned by the land. What is leftover after labor, management and capital has been paid.
Applies an index or trend factor to a previous value from an appropriate construction cost index.
Factored Historical Cost Method
Change
Forces that affect market
design deficiency that can be replaced or redesigned at a relatively low cost.
Functional obsolescence curable
Cost
RCN normally sets the upper limits of value
Increasing and Decreasing returns
(Manure Theory) once you get too much you start to loose the value.
Profit tends to breed competition and excel profit tends to breed ruinous competition.
Competition
Contribution
Basis for adjustment process in sales comparison approach fireplaces on house contributes so much of th
the cost of creating an EXACT REPLICA based on current prices for labor and materials.
Reproduction Cost
Front foot, square foot, acre and section, site, units buildable
Elements for land valuation
Income
Capitalizes net income into value
Basis for adjustment process in sales comparison approach fireplaces on house contributes so much of th
Contribution
Age/Life
Cost of building is depreciated at a fixed annual percentage rate.
Negative Plottage
Combining of property causing a new site to have lesser utility.
Cost of building is depreciated at a fixed annual percentage rate.
Age/Life
RCN normally sets the upper limits of value
Cost
Abstraction method
Employs the elements of the Cost approach it involves subtracting out the cost of improvements what is leftover is the land value
Pay no more for real estate when you can buy equal for less.
Substitution
Functional Obsolescence incurable
Design deficiency that is not economically feasible to remedy.
Effective Age
The age of a building based on the actual wear and tear and maintenance or lack of it. (EFF AGE)
Reproduction Cost
the cost of creating an EXACT REPLICA based on current prices for labor and materials.
Knowledgeable buyer willing seller arms length transaction.
FMV
Proper mix of types and uses of properties
Balance
Combining of property causing a new site to have lesser utility.
Negative Plottage
The age of a building based on the actual wear and tear and maintenance or lack of it. (EFF AGE)
Effective Age
Modified age/life
Straight line depreciation with extra
Supply & Demand
Opening of a major industrial plant in a small rural town. Housing may be in great demand.
The cost of creating an improvement having the same or equivalent utility as another.
Replacement Cost
Replacement Cost
The cost of creating an improvement having the same or equivalent utility as another.
Opening of a major industrial plant in a small rural town. Housing may be in great demand.
Supply & Demand
Anticipation
Value created by future benefits.
Depreciation
a loss in utility and value from ANY CAUSE
Market Approach
Based on the principle of SUBSTITUTION; most important of all evaluation principles.
Method-Breaks the cost down into components of work done by subcontractors using workable units such as sq. foot, linear foot, and other units.
Unit-In-Place
Total period of time that the improvements contributes value to the property (TEL) Formula: REL+EFF=TEL
Total Economic Life
Interpolation
The process of finding intermediate terms or numbers in a sequence of terms or numbers
