Overview of Real Estate Valuation Flashcards
What is the purpose of an appraisal?
To estimate a specific type of defined value.
What is the function of an appraisal?
Appraisals are used to make buying and selling decisions or other uses based on the intended use of the appraisal.
All appraisals for federally related transactions must conform to what standard?
Uniform Standards of Professional Appraisal Practice (USPAP). Florida law states states regardless of federal related transactions must conform to the same standard.
What is a registered trainee appraiser?
An individual who is registered with the DPBR and may only perform appraisals under the supervision of a licensed or certified appraiser. They can only accept appraisal assignments from their supervisor not the public.
What is the difference between a residential appraiser and a certified general appraiser?
A residential appraiser can give appraisals for residential property up to 4 units regardless of transaction value or complexity.
A certified general appraiser can appraise all property. No restrictions.
What is Assemblage
The combining of 2 or more adjoining properties into one track, consolidation. Done to increase usability and/or value.
What is plottage
the added VALUE as a result of assemblage. (combining two or more lots into one lot.)
What is progression?
The value of a POS property increases because it is next to a nicer property. Opposite of Regression.
What is Regression?
Opposite of progression, the value of a superior property is reduced by a POS next to it.
Situs
refer to the preciseness of location and the benefits of the location. Road cuts, visibility, traffic counts, ect…
What is market value
the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in the definition is the consumation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
1) buy and seller are motivated.
2) both parties are well informed.
3) reasonable amount of time in open market
4) payment is in US Dollars or financed dollars.
5) zero sales concessions granted by someone affiliated with the sale.
What is the principle of substitution
Like kind goods or services available with similar benefits will be shopped for the lowest price.
What is the principle of Increasing and Decreasing Returns?
If you spend more money you can expect the recapture to increase.
What is the principle of conformity.
Says property values will be maximized when there is uniformity. Adversely, if there is a savear departure from architectural style, size, amenities there will be adverse value
What is the principle of highest and best use.
Two types
1) Highest and best use as if vacant.
2) Highest and best use as if improved.
When looking at a site for highest and best use as if the property was vacant then do not look at the condition of the improvements.
