Things I Need To Remember Flashcards
Demand is influenced by what 5 things?
P CH I M P
Price
Composition of household
Income
Mortgage availability
Preferences
Supply is influenced by availability of what 4 things?
Skilled labor availability
Construction loans availability
Land availability
material availability
Government can interfere in property
PETE
Police power
Escheat
Taxation
Eminent domain
This approach is used for appraising residential property or vacant land. This approach compares the subject property to similar properties and makes adjustments on the basis of the date of the sale, the location, the physical features and/or amenities
The Sales Comparison Approach (also called Market Data Approach)
This approach is used for buildings, which do not have market data because they are unusual properties (i.e. school, post office, library, etc. or a building without income).
The Cost Approach (also called The Summation Approach)
This approach is used for income generating properties such as apartments, retail centers, multi-tenant office buildings, etc.
Income Approach
P – V = E; E – O = N
The income appraisal approach:
PVEON -
Potential Gross Income,
Vacancy and Collection Losses,
Effective Gross Income,
Operating Expenses,
Net Operating Income
the maximum value of a property tends to be set by the cost of purchasing an equally desirable and valuable substitute property. (Comparison shopping- basis for Market Data Approach.)
Substitution
means the value of any component that may or may not give value to the whole.
Contribution
using all of the tools available the appraiser uses the three appraisal processes?
- Market Data or Sales Comparison
- Cost
- Income Approaches
is the amount of value or interest that an owner has in the property over and above the loans attached to the property.
Equity
is the use of other people’s money (borrowed) to spread the risk of an investment.
Leverage
The Cap Rate measures the amount of risk involved in the transaction; the _______ the Cap Rate, the greater the risk. The higher the Cap Rate, the _______ the sale price should be.
higher; lower
Real estate taxes derived from assessed value are called
“Ad Valorem” taxes
The constitution of Florida allows up to ________ for the homeowner’s homestead exemption.
$50,000
