LESSON 2

Question 1

Market value

Answer 1

most probable price as of a specified date for which property should sell after reasonable exposure in a competitive market under all conditions requisite to a fair sale

Question 2

value to the owner

Answer 2

the personal opinion of a property value held by an individual owner; in appraisal this refers to floor and ceiling

Question 3

market value conditions

Answer 3

value is price that might be reasonably expected , willing seller and willing buyer, adequate time and exposure to the market

Question 4

floor price

Answer 4

minimum price at which a seller is willing to sell their property

Question 5

ceiling price

Answer 5

the maximum price a purchaser is willing to pay for a property

Question 6

justified investment price

Answer 6

a value that is justified for a single owner based on their specific investment needs and wants

Question 7

fee simple or absolute ownership

Answer 7

closest to unlimited ownership of real estate in Canada

Question 8

expropriation

Answer 8

government to take private property for public use upon payment of just compensation

Question 9

chattel

Answer 9

personal property, not affixed to the real estate

Question 10

fixture

Answer 10

part of the real estate

Question 11

property analysis from broad to specific

Answer 11

broad- province, region and city
subject neighbourhood and immediate area
subject property land and site
subject improvements

Question 12

market areas, neighbourhoods, and districts

Answer 12

change and transition
life cycle
growth
stability
decline
revitalization
evidence of transition

Question 13

environmental influences

Answer 13

topography and physical features are crucial: local amenities, traffic patterns and nuisances

Question 14

property taxes=

Answer 14

mill rate * AV / $1000

Question 15

physical characteristics of land

Answer 15

site size, and shape, corner influence, pottage potential, excess land and surplus land, topography, soil analysis, utilities, site improvements, accessibility, environment

Question 16

excess

Answer 16

land not required to support the current improvements

can be repurposed and have its own highest and best use

Question 17

topography

Answer 17

underlying soil conditions determine what can be built on a site

Question 18

environment

Answer 18

the direction of the site faces affect its value , Many prefer year yards facing south or west

Question 19

latent value

Answer 19

value possessed by a property that has potential for redevelopment because it is currently not employed at its highest and best use

Question 20

highest and best use

Answer 20

provides the max net return in the future, with consideration for all legal, physical, financial, and market constraints

Question 21

HBU

Answer 21

results in the highest land value

what is reasonable and probable

Question 22

HBU

Answer 22

Physically possible
financially feasible
legally permissible
maximally productive

Question 23

PEGS; factors affecting land values

Answer 23

physical, environmental, and locational

economic
government
social

Question 24

off site costs

Answer 24

municipal permits

Question 25

three income focused methods

Answer 25

land residual, ground rent cap, subdivision or discounted cash flow

Question 26

land valuation techniques

Answer 26

DCA
Extraction
allocation
income
land residual
ground rent
subdivision development

Question 27

DCA

Answer 27

most common used and preferred method

Question 28

lot measurement or area basis

Answer 28

price per front metre, price per square feet, price per lot

Question 29

density of development basis

Answer 29

price per building unit
price per buildable square metre/foot FAR, FSR

Question 30

adjustments for size

Answer 30

acre = 1m , 100acre is not going to be 100m, adjustments are made for size, typically larger sites worth less

Question 31

principle of diminishing marginal utility

Answer 31

price of smaller sf is greater than property with higher SF