Part 15 Vocab Flashcards
non-market financing can affect the sale prices of comparable properties. The mode and terms of financing must be investigated and an adjustment made (if necessary) to establish a ______ price. It’s based on market reaction to the favorable financing (i.e. how would a typical buyer think and what would the buyer be willing to pay for the favorable financing?)
cash equivalency
Situations that may require adjustments:
- mortgage assumptions at favorable rates
- installment sale contracts
- wraparound loans
- points paid by seller (to lower the monthly payments of the buyer)
- seller-financed loans
List the elements of comparison in the order they are commonly applied
1) real property rights conveyed
2) financing terms
3) conditions of the sale
4) expenditures made immediately after purchase
5) market conditions
6) location
7) physical characteristics
8) economic characteristics
9) use/zoning
10) non-realty components of value
____ financing can affect the sale prices of comparable properties. The mode and terms of financing must be investigated and an adjustment made (if necessary) to establish a cash equivalent price.
non-market financing
Situations that may require adjustments:
- mortgage assumptions at favorable rates
- installment sale contracts
- wraparound loans
- points paid by seller (to lower the monthly payments of the buyer)
- seller-financed loans
Examples of _____ are personal property (ex: furniture, equipment), gift inducements and cash rebates, mortgage buydowns (seller paid points), seller paid closing costs for buyer, non-market transactions on the side between buyer and seller (ex: seller paying an inflated price for a personal property item of the buyer and the proceeds are then used in the buyer’s equity down payment.)
seller concessions
the use of _____ facilitates the analysis of comparability between subject property and comps. The units selected depend on the appraisal problem and the nature of the property.
units of comparison
ex: price per square foot or cubic foot, price per entire property, price per acre, price per aparment unit/boat slip/storage space, price per guest room (hotels), per seat capacity (restaurant/theater)
