Part 9 Flashcards
Market Value
“A type of value, stated as an opinion, that presumes the transfer of a property (i.e., a right of ownership or a bundle of such rights), as of a certain date, under specific conditions set forth in the value definition that is identified by the appraiser as applicable in an appraisal.” (USPAP, Definitions)
appraiser’s conclusion.
A.K.A value opinion
Market value.
1 of several types of value
Market value is based upon the economic principle of ________ ________.
exchange value.
Market value is expressed as the _______ _______ price.
most probable price.
1 of the major components that must be in all definitions of market value.
The ________ ________ is simply the date of the value opinion.
effective date
Effective date can be expressed in one of three ways:
1) Retrospective (past)
2) Current (present)
3) Prospective (future)
1 of the major components that must be in all definitions of market value.
The sale price of a comparable sale is adjusted by the full amount that a seller concession affected the price. The adjusted sale price must reflect the price the property would have sold for without any sale concessions, special inducements, creative financing, or other incentives. This defines what?
Cash equivalency. The amount of the adjustment for concessions is not necessarily a dollar-for-dollar calculation. Instead, it must reflect the adjustment necessary to convert the price paid to a cash equivalent sale price that reflects market value as defined.
1 of the major components that must be in all definitions of market value.
A financial payment, special benefit, or non-realty item included in the sale contract or rental agreement as an incentive to the sale or lease. This defines what?
Concessions.
When it comes to these kinds of sales concessions, the appraiser treats the appraised property as if it was also sold for cash or its equivalent.
1 of the major components that must be in all definitions of market value.
These are intended to buy down the buyer’s mortgage amount and lower the monthly payment. When paid by the seller, the expense is typically added to the sale price in order to offset the dollar amount of the concession.
Seller-paid points
A.K.A. Discount points
1 of the major components that must be in all definitions of market value.
A component of defining market value is _________ ________ in a competitive market under all conditions requisite to a fair sale.
reasonable exposure
1 of the major components that must be in all definitions of market value.
Estimating market value for federal financial institutions requires identification of the desires and priorities of
well-informed buyers and sellers.
More or less the buyer and seller each acting:
Prudently
Knowledgeably
For self-interest
Unaffected by undue stimulus
1 of the major components that must be in all definitions of market value.
Market value is the most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed terms, for which the specified property rights should sell after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably and for self-interest, and assuming that neither is under undue duress.
The sentence describes what?
All the combined components of market value.
This means a sale between unrelated parties under no duress.
Arm’s-length transaction
______ ______ is the time a property was available for sale in the market and always presumes to occur prior to the effective date of the appraisal. The concept of reasonable exposure includes not only sufficient and reasonable time but also reasonable effort to sell the property.
Exposure time
______ ______ is an opinion of the amount of time it might take to sell a real or personal property interest at the concluded market value level during the period immediately after the effective date of an appraisal.
Marketing time
Value estimate is the preferred way to state your conclusion of market value, true or false?
False. The preferred phrase in use today is value opinion when referring to an
appraiser’s conclusion.
A prospective value is based on
a date in the future.
