part 3 unit 20- appraisal and comparative market analysis Flashcards
a formal, impartial estimate or opinion of value, usually written, of an adequately described property, as of a specific date, and supported by the presentation and analysis of relevant data.
Appraisal
comparative market analysis (CMA)
Provides info on similar properties in the marketplace
market price
what the item would sell at today
mass appraisal
used to establish fairness and equity
“the amount of tax payable per dollar of the assessed value of a property”
Mill Rate
cost approach advantages/disadvantages
-people understand it, easy
-construction costs are constantly changing, difficult to estimate depreciation
direct comparison approach adv and disadvantages
-people understand it, accepted by courts and public, avoids problems with estimating
-requires careful judgement and experience. May be difficult to obtain info
income approach dis and adv
-difficult to select an appropriate capitalization, stimating income and operating expenses can sometimes prove difficult.
-applicable in estimating the value of investment properties
of the three approaches direct comparison most relates to
the comparative market analysis
most common method to establish the value of land is
direct comparison approach
depreciation
loss in value due to any cause
three most common causes for depreciation
-physical deterioration
-funtional obsolescence
-external obsolescence
economic life formula
effective age+ remaining economic life
accured depreciation formula
effective age/economic life of structure x replacement cost
examples of functional obsolescence
-outdated mechanical components
- too few amenities
-hallway/stairway too narrow
