N9 Appraisal Flashcards
An estimate of opinion of value.
Appraisal
Four Major Elements of Value:
- _____________
- _____________
- _____________
- _____________
- Demand
- Utility
- Scarcity
- Transferability
NOTE: use DUST
Market Value
The amount a willing buyer will pay and a willing seller will accept.
A transaction in which the parties are dealing from equal bargaining positions.
Arm’s Length Transaction
Market Price
The actual amount of money given in a transaction.
The amount of money required to build a building at current prices.
Cost
The principal of _________ states that value is affected by the scarcity of a product and the desire for that product.
Supply & Demand
Highest and Best Use
The use of a property that produces the highest net return.
Land that is not needed to accomplish the highest and best use.
Excess Land
The principal of _________ states that the most a person will pay for a product is set by what it costs to buy a reasonable duplicate.
Substitution
That value will tend to be more stable in an area where there is a reasonable degree of similarity of property types is a statement of the principal of ___________.
Conformity
The principle of _______ holds that the presence of lesser properties will adversely affect the value of greater properties.
Regression
The principle of ______ holds that the value of a component part is determined by how much that part adds to or detracts from the value of the whole.
Contribution
The fact that values do not remain constant is a statement of the principle of _______.
Change
The principle of ________ holds that excess profits will breed competitors, which will then reduce profits.
Competition
The fact that value is affected by the anticipation of future events is a statement of the principle of ________.
Anticipation
Appreciation
An increase in value for any reason.
Increase in value due to the owner’s efforts.
Earned Increment
Unearned Increment
An increase in value due to no effort by the owner.
Plottage AKA Assemblage.
An increase in value created by joining smaller parcels into one larger parcel.
Depreciation
A decrease in value for any reason.
Deterioration
A loss in value due to physical wear and tear.
A loss in value due to outdated features such as an old bathroom or kitchen.
Functional Obsolescence
A loss in value created by technological advances.
Functional Obsolescence
A loss in value created by a poor floor plan.
Functional Obsolescence
Curable
When it is economically feasible to fix a defect.
When it is not economically feasible to fix a defect.
Incurable
A loss in value that results from conditions outside the property.
Economic Obsolescence AKA External Obsolescence
The three appraisal approaches are:
- ______________
- ______________
- ______________
- Comparison aka Market Data
- Cost aka Summation
- Income aka Capitalization
Estimating the value of a property by comparing the subject property to similar properties that have recently sold .
Comparison aka Market Data
In a Comparison Approach (Market Data Approach), an appraiser should use comparable properties that were sold “____________________”
” At Arm’s Length”
A minimum of ____ comparables should be used when using the market data approach/comparison approach..
3 or Three
In the comparison approach/market data approach, adjustments are often made to bring the ____ properties in line with the ____ property.
Comparable, Subject
The property with the______ adjustments is the most comparable.
Fewest/Least.
What is the math Formula For the Cost Approach/ Summation Approach?
Replacement Cost - Depreciation \+ Land Value \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ = Appraised Value
Replacement Cost
The cost to build a reasonable duplicate of a building at today’s prices.
The cost to build an EXACT duplicate of a building at today’s prices
Reproduction Cost
In the cost approach/summation approach, the land value is most often estimated by using the __________.
Comparison Approach/Market Data Approach
Determined by measuring the exterior dimensions of the exterior walls of a building.
Square Footage Living Area
