Value Flashcards
the value results from the interaction of the supply available and the extent of demand
supply and demand
systematic procedures used by an appraiser to gather and analyze data in order to arrive at a final conclusion
The Appraisal process
an estimate or opinion of value made by a qualified person
Appraisal
a person qualified by experience education and licencing to make estimate values
Appraiser
increase in value
Appreciation
people employed by lending institutions government agencies or insurance companies to make appraisals for their employees
Staff Appraisers
are self employed person s who perform their services on a individual basis for a negotitated fee
Fee Appraisers
used to determine ad valorumproperty tax
Accessed Value
establishes just compensation for Eminent Domain
Condemnation Value
determines replacement value for reimbursement under a insurance policy
Insured Value
the price a property would be expected to bring in the open market under normal conditions (estimated price)
Market Value
The amount a property actually sells
Market Price
the parties are not related in a transaction
Arms Length transacrion
it is the sum of all past expenses that have gone into bringing a property into being
Cost
an increase in value brought about by the process of assemblage.the result of combining several lots
Plottage
The period of time over which a property is estimated to be profitable
Economic Life
Loss in value to adverse conditions external to the property and there for beyond the owners control
Economic Obsolescence
The amount of rent a property could command in a open marketq
Economic rent/Market Rent
Property’s age based upon its condition and appearancce
Effective Age
The actual gross income property is expected to produce
Effective gross income
process for recovery of investment in a building
Accrual Depreciation(return on investment)
actual depreciation in a property that has already occurred as of a given date
Accrued Depreciation
the use of a property which will yield the greatest return on the property and greatest current value
Highest and best use
the basis for the valuation process and applies to all 3 approaches (Market Data Approach,Cost Approach, and Income Approach
Principle of substitution
explains the old adage(newest house in the neighborhood
Principle of regression
the least expensive property gains value
Principle of progression
location of area or preference
situs
are used by appraisers to estimate value when the front portion of lot is more valuable than added depth at the rear
Depth tables
a lot that joins the rear of a corner lot
key lot
is the process of combining several individually owned adjoining parcels ion one tract
Assemblage
above grade heated enclosed and finished area
Gross living area
(BPO) using resent sales and listings
Market Data Approach/Sales Comparison
(investment property) uses net operating income to project an estimate value
Income or Capitalization approach
determining the value on how to build a replica
Cost or replacement approach
how long a structure with normal maintenance will remain physically sound
Physical Life
the only approach in which land is evaluated seperately
Estimated land value
the number of years at the time of the appraisals the property would remain economically productive
remaining economic life
effective gross income minus the total operating expenses
Net Operating Income
a number that when multiplied by a property’s estimated gross rent ,produces an indication of the property’s vaule
Gross Rent Multiplier
items of economic obsolescence (sometimes physical deterioration or functional obsolesce beyond owners control)
Incurable Depreciation
determines replacement value for reimbursement under a insurance
Insured value
The _______ for an item might be based on actual need or desire(D in DUST)
Demand
An item must serve some purpose,even
Utility/Usefulness(U in DUST)
Short supply relative to the demand
Scarcity(S in DUST)
________ refers to the ability for ownership to be conveyed from one person to another with relative case
Transferabilty (T in DUST)
an appraisal report summarizing all data, techniques, and methods to arrive at a final value
Narrative Report
analysis if a homogeneous grouping of individuals or business as a part of a appraisals
Neighborhood Analysis
method of estimating accrued depreciation by calculating the cost to correct all curable depreciation
Cost to Cure/Observed Conditions
Placement of improvements in relation to the positive and negative features of a lot
Orientation
The ability for soil to absorb water
Percolation
occurs because of normal wear and tear by natural elements
Physical Detoration
map showing how a property is subdivided into lotts
Plat
expected rental income from a property based upon full occupancy for a year
Potential Gross Income
method of estimating the current cost of reconstructing an improvement using a detailed breakdown of all labor
Quantity Survey
an increase in value due to no effort on the part of the owner
Unearned increment
method of estimating the current cost of reconstructing an improvement by estimating cost (breakdown of price into units)
Unit in Place
interest earned by an investor on the investment
Yield/Return
