Terms Flashcards
The liquidation of a financial obligation on an installment basis; also, recovery over a period of cost or value.
Amortization
One qualified by education, training and experience who is hired to estimate the value of real and personal property based on experience, judgment, facts, and use of formal appraisal processes.
Appraiser
The highest price in terms of money which a property will bring in competitive and open market and under all conditions required for a fair sale, i.e., the buyer and seller acting prudently, knowledgeably and neither affected by undue pressures.
Market Value
Present worth of future benefits arising out of ownership to typical users/investors.
Value
An estimate of the value of property resulting from an analysis of facts about the property.
Appraisal
The desire for possession or ownership backed by the financial means to satisfy that need.
Effective Demand
The capacity to satisfy human needs and desires.
Utility
The supply of property in relation to effective demand.
Scarcity
The relative ease with which ownership rights are transferred from one person to another.
Transferability
The highest price in terms of money which a property will bring in competitive and open market and under all conditions required for a fair sale, i.e., the buyer and seller acting prudently, knowledgeably and neither affected by undue pressures.
Market Value
The cost of replacing a structure completely destroyed by an insured hazard.
Insured Value
The current value for accounting purposes of an asset expressed as original cost plus capital additions minus accumulated depreciation.
Book Value
A valuation placed upon a piece of property by a public authority as a basis for levying taxes on the property.
Assessed Value
The most probable use to which a property is suited that results in its highest value or highest returns to the land.
Highest and Best Use
The price paid regardless of pressures, motives or intelligence.
Market Price
Affirms that the maximum value of a property tends to be set by the cost of acquiring an equally desirable and value substitute property, assuming no costly delay is encountered in making the substitution.
Principle of Substitution
The principle that states the value of a property will increase if the supply decreases and the demand will either increase or remains constant, and visa versa.
Supply and Demand
Holds that the maximum value is realized when a reasonable degree of homogeneity of improvements is present.
Principle of Conformity
The influences outside of a property can have a positive or negative affect on its value.
Principle of Externalities
Affirms that value is created by anticipated benefits to be derived in the future.
Principle of Anticipation
A component part of a property is valued in proportion to its contribution to the value of the whole. Holds that maximum values are achieved when the improvements on a site produce the highest (net) return, commensurate with the investment.
Principle of Contribution
Holds that profits tend to breed competition and excess profits tend to breed ruinous completion.
Principle of Competition
Holds that it is the future, not the past, which is of prime importance in estimating value. Change is largely the result of cause and effect.
Principle of Change
One of the three methods in the appraisal process. A means of comparing similar type properties, which have recently sold, to the subject property. Commonly used in comparing residential properties.
Sales Comparison Approach (Market Data Approach)