UNIT 11 - VALUATION & APPRAISAL

Question 1

Value

Answer 1

present worth of rights to future benefits that come from property ownership

Question 2

purpose of appraisal

Answer 2

defines how the appraisal process will be laid out

Question 3

intended use of appraisal

Answer 3

decides which report type is most appropriate

Question 4

market value

Answer 4

objective value, determined by data.

Question 5

value in use (utility value)

Answer 5

usefulness of the property to a specific user

Question 6

DUST (value)

Answer 6

Demand (effective demand)
Utility (functional utility)
Scarcity
Transferability

Question 7

thoroughfare condition

Answer 7

width of streets, traffic congestion, and condition of pavement

Question 8

principle of substitution

Answer 8

basis of the appraisal process, where value is set by the cost of getting an equally desirable substitute.

Question 9

principle of conformity

Answer 9

more that structures are in harmony with one another, the more valuable each of those structures.

Question 10

principle of highest and best use

Answer 10

reasonable use of real property at the time of the appraisal, which is most likely to produce the greatest net return to the land/building over a given period of time.

Question 11

principle of progression

Answer 11

value of an inferior property will be worth more because of the presence of greater value properties nearby

Question 12

principle of regression

Answer 12

opposite of progression

Question 13

principle of balance

Answer 13

value is created and sustained when contrasting, opposing, or interacting elements are in a state of equilibrium.

Question 14

principle of anticipation

Answer 14

value is created by the expectation of future benefits

Question 15

principle of contribution

Answer 15

worth of an improvement as well as what it adds to the entire property’s market value, regardless of the actual cost of the improvement.

Question 16

curable depreciation

Answer 16

loss in value that is economically feasible to correct

Question 17

incurable depreciation

Answer 17

physically impossible to cure or too expensive to be worth curing.

Question 18

straight-line method

Answer 18

assumes a building will decline in value the same amt each year until nothing is left.

Question 19

capitalization

Answer 19

the process of calculating a property’s present worth on the basis of its capacity to continue producing an income stream

Question 20

plottage increment

Answer 20

the increase in value when several smaller parcels are combined together into one larger parcel

Question 21

amenities

Answer 21

features that add value to a property

Question 22

utility

Answer 22

the ability of a property to satisfy a need or desire, such as shelter, income, or amenities.

Question 23

improvements

Answer 23

any buildings or structures on a lot

Question 24

economic rent

Answer 24

reasonable rental expectancy if the property were available for renting at the time of its valuation

Question 25

obsolescence

Answer 25

may be caused by external or economic changes and decreases the usefulness of property or causes deterioration

Question 26

depth table

Answer 26

A depth table is a table used by real estate appraisers to show land values in percentages based on variations in the depth of the lot. Typically used for commercial properties.