Fundamental of Real Property Appraisal - Assessment and Appraisal Theory Flashcards
The property tax is an _________ tax, meaning it is based on value.
ad valorem
The assessor is responsible for the _______, ________ and ________ of all taxable property.
discovery, listing, valuation
The taxable location of personal property is referred to as its _________.
situs
An estimate of value, usually in writing, of an adequately described property, as of a given date, is termed ___________.
an appraisal
A jurisdiction’s tax rate is determined by dividing the __________ to be derived from property tax by the total __________ ___________ of the taxing district.
budget, assessed valuation
The type of value usually estimated by the assessor is __________ value.
market
The ________ ______ _______ reflects the ratio between the current tax bill and the property value.
effective tax rate
In order for a property to have value, it must have
_______, ________, ________, and
_________ _______ _______
utility, scarcity, desirability and effective purchasing power
The use that generates the highest net return to a property over a reasonable time period is called its __________________.
highest and best use.
The principle of _______ states that maximum value of a neighborhood is attained when the uses of land are perfectly complementary.
balance
Which appraisal principle affirms that land cannot be valued on the basis of one use while improvements are valued on the basis of another?
Consistent use
List the four test that the appraiser must make in the analysis of the highest and best use.
- Legally Permissible
- Physically possible
- Financially feasible
- Most productive
________ ________ is a parcel of land and any structures or improvements that are permanently affixed thereto.
Real estate
Property is considered ______ if it can be moved without causing any damage or change to either the item of property or the structure to which it is attached.
personal
Assessment level times the tax rate equals the
________ _____ ________.
effective tax rate
___________ is the point at which the forces of supply and forces of demand meet.
Equilibrium
List two types of highest and best use analysis.
- As if vacant
2. As if improved
The typical life cycle of a neighborhood included _______, _______, _______ and __________.
growth, stability, decline and revitalization
What elements of the marketplace are most likely to contribute to a change in demand?
Consumer tastes and preference Consumer income Price of related commodities Consumer expectations Price of the commodity
Market value is defined as the most probable price of a property in terms of money, assuming:
Buyer and seller are typically motivated,
A reasonable time is allowed for exposure in the open market
Payment is made in terms of cash in US dollars or in terms of financial arrangements comparable thereto.
_________ refers to the amount of goods that producers are willing to sell at a given price during a specified time period.
Supply
Ownership of all legal rights to property is limited by government in four ways:
Taxation
Police power
Eminent domain
Escheat
An assessed value not statutorily at 100 percent of market value is known as a ___________ assessment.
fractional
The underlying principle for the three approaches to appraisal is ____________.
substitution
The seven steps of the appraisal process are as follows:
Definition of the problem
Scope of work
Preliminary survey and planning
Data collection and analysis
Highest and best use
Application of the data and the three approaches
Correlation/reconciliation to final value estimate
The basis for the adjustments in the sales comparison approach to value is the principle of ___________.
contribution
_______ ___ ____ represents the value of a property for a specific use.
Value in use
List any two types of private encumbrances that can be placed on ownership of real property.
Rights of co-owners Condo and subdivision restrictions Covenants, conditions and restrictions found in the chain of title to the property Mortgages Easements and right of way Liens and judgments Leases
The principle of ______________ states that value is created by the expected future benefits to be derived from the property
anticipation
The six basic rights associated with property are as follows: Key word (SLUGER)
Sell Lease Use Give away Enter or leave Refuse to do any of the above
The ownership of all legal rights to property is known a ______ ________ (___________)
fee simple (fee simple absolute)
Determining the identity of the property to be appraised is a part of the ______ step in the appraisal process.
first
The three types of boundaries used to delineate neighborhood are ___________, _________, and ________.
political, man-made, natural
Under the step in the appraisal process that is termed data collection and analysis, specific data include
site data
The four forces that influence value and must be considered in neighborhood analysis are as follows:
Physical (environmental)
Economic
Governmental
Social
The typical life cycle of a neighborhood can be extended or shortened by changes in _______ factors.
economic
An area of complementary land uses in which all properties are similarly influenced by the four forces affecting value is termed a ___________
neighborhood
Municipal services, planning and zoning are examples of __________ forces that affect neighborhoods.
governmental
What are the four basic elements of supply?
Cost of production
Price of other goods
Entrepreneur expectations
Number of sellers
The basis for applying the adjustment in the sales comparison approach
Contribution
A property must be valued with a single use for the entire property
Consistent Use
The amount of goods that producers are willing to sell under various conditions during a given period
Supply
Net income remaining after the cost of labor, management, and capital have been paid
Surplus productivity
Present worth of future benefits
Anticipation
Market value of a property tends to be set by the cost of acquiring an equally desirable and valuable property
Substitution
Maximum value is obtained when the four agents of production attain a state of equilibrium
Balance
Quantities of various goods that people are willing and able to buy during some period, given the choices available to them
Demand
The tendency of social and economic forces affecting forces affecting supply and demand to shift overtime
Change
Availability must be in harmony with demand. If one or the other is in excess, prices will increase or decrease
Competition
The value of property depends, in part, on it relationship to it’s surroundings
Conformity
After a certain point, the addition of successive increments of one agent of production decreases future incomes or amenities
Increasing/Decreasing returns
The value of a lower priced property is increased by its association with better properties of the same type
Progression
