RE Appraisal: Appraisal and Value Flashcards
What is the first step in the appraisal process?
Define the problem and the scope of work
What does an appraiser do after they decide which value approach to use?
Determines type of data needed and sources to be consulted, then collects the data
What is the definition of highest and best use?
Use that is:
- Legally permissible
- Physically possible
- Financially feasible
- Maximally productive
What is ‘allocation’ regarding house appraisals?
The Land to total value ratio (found from comparable properties) applied to the subject property.
The cost approach would be most reliable for which type of property?
Special-use properties such as public or governmental structures
(i.e, county courthouses, marinas, unique properties)
The income approach is more specifically used for appraising what type of property?
Commercial and investment properties
What forms can appraisal reports take?
- Short or Long-form narrative reports
- Form reports
- Letter/oral reports
Depreciation refers to a loss in value of a property due to factors such as what?
- Wear and tear
- Age
- Poor location
When an appraiser is determining a property’s value, what types of properties are being compared to the one being appraised?
Recently Sold
The principle of supply and demand says the value of a property depends on what?
- How many properties are available in an area
- Property prices
- Number of prospective buyers
What is Reproduction Cost?
the cost at today’s prices of producing an exact duplicate of the current building, including its improvements and its flaws.
What is Replacement Cost?
the construction cost at today’s prices of producing a similar or equivalent structure.
What approach uses the Principle of Substitution?
Sales Comparison Approach
What is the Principle of Substitution?
When a buyer will pay no more for a property than the cost of an equally desirable (and comparable) alternative property.
The income approach is based on which two principles of value?
- Anticipation
- Substitution
