Valuation Process and Pricing Properties Flashcards
An appraisal is an estimate of a…
property’s value by an appraiser who is usually presumed to be an expert in his/her work.
An appraisal is specific to a…
certain date in time.
An appraisal may be used to…
help determine the market value of a property.
Residential properties are typically appraised using the…
sales comparison approach.
A CMA (Comparative Market Analysis) is a property evaluation that determines property value by…
comparing other properties currently on the market, properties that have recently sold, and expired listings.
A CMA (Comparative Market Analysis) is an analysis of…
the competition in the marketplace that a property will face upon sale attempts.
A CMA (Comparative Market Analysis) is NOT an appraisal. Instead, it is an…
opinion of value.
A CMA (Comparative Market Analysis) is typically prepared by a…
real estate agent.
Residential market analysis is a study of the is a…
study of the property being listed.
The residential market analysis views the property in light of the…
conditions in the marketplace.
These conditions determine how the agent should market the property.
A residential market analysis will analyze the following:
1) Recently sold properties
2) Current competing properties
3) Recently expired properties
4) Buyer appeal
5) Market position
6) Positives and negatives of the property being marketed
7) Area market conditions
8) Recommended terms
9) Market value range
Market value is the most probable price that a property should bring if…
exposed for sale in the open market for a reasonable period of time, with both the buyer and seller aware of current market conditions, neither being under duress.
Market value applies to an…
“arm’s length transaction”.
Also known as ‘Fair Market Value’.
Market value is driven by…
supply and demand in the competitive marketplace.
Market price refers to the…
actual selling price of a property.
Remember: market value is the probable price, while market price is the…
actual selling price.
There are two types of costs associated with construction:
1) Direct costs: also known as hard costs, they include the cost of labor and materials.
2) Indirect costs: costs that create and support the project. These include architectural and engineering fees, attorney fees, and financing costs, among others.
Obsolescence is one of the causes of…
depreciation
Obsolescence is the…
loss of desirability and usefulness caused by new inventions, changes in design, and improved processes for production, or from the influence of external factors. Obsolescence may be either economic or functional.
Functional Obsolescence can be an…
outdated design or floor plan.
