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16 Cards in this Set
- Front
- Back
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APPRAISAL |
Estimate or opinion of Value completed by a licensed appraiser of a specific property as of a specific date... BROKERS do BPO- broker priced opinions |
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VALUE |
4 characteristics: 1. Demand 2. Utility 3. Scarcity 4. Transferability |
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MARKET VALUE |
Reasonable opinion of a property's value; actual selling price of a property; cost may not equal either market value or market price. |
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MARKET PRICE |
what a property actually sells for, its sales price |
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FORCES AND FACTORS INFLUENCING PROPERTY VALUE |
1. Social Forces 2. Economic Forces 3. Political Forces 4. Physical Forces |
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ECONOMIC PRINCIPLES OF VALUE |
1. Highest and Best Use - most profitable single use to which a property is adapted 2. Substitution - when several items with essentially the same amenities and utilities are avail, the item with the lowest price will attract most demand 3. Supply and Demand - value will change if supply decreases and demand either increases or remains constant 4. Conformity - means that max value is realized if the use of land conforms to existing neighborhood standards 5. Anticipation 6. Contribution 7. Competition 8. Change |
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SALES COMPARISON APPROACH
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market data approach compare subject property with recently sold comparable properties 1. Date of Sale 2. Location 3. Physical features 4. Terms and Conditions of Sale - to be sure that the sale was an 'arm's-length transaction' which means that the property did not sell for an unusually high or low price bc of a special relationship bt the buyer and seller |
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COMPARABLES |
should be similar to subject property and should have been recently sold within 120 days in an open and competitive market, under typical market conditions. |
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CMA |
Comparative Market Analysis - an informal version of the sales comparison approach is used by real estate brokers to help a seller-clientset a realistic price for residential real estate or to help a buyer-client determine a reasonable purchase price for residential real estate. |
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COST APPROACH |
value is based on the principle of substitution, which states that the max value of a property tends to be set by the cost of acquiring an equally desirable and valuable substitute property.
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COST APPROACH TO VALUE |
land valuation + Building valuation - depreciation = Indicated Value by Cost approach To get only the building you would subtract the building valuation - depreciation |
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SQUARE FOOT METHOD |
cost per sq foot multiplied by the number of sq feet in the subject blding |
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FUNCTIONAL OBSOLESENCE |
curable problem - physical or design features that are no longer considered desirable by property buyers incurable problem - a multi story industrial blding that a it would cost a lot to a/c etc. |
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EFFECTIVE AGE |
Multiply the economic life x the amount of depreciation that the building has already suffered example - if a building has suffered 25% depreciation and it has an economic life of 25 yrs 25 x .25 = 6.25 yrs 25 - 6.25 = 18.75 remaining yrs of economic life |
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INCOME CAPITALIZATION APPROACH |
Gross Income - Vacancy and rent collection losses = Effective Gross Income Effective Gross Income - Annual operating expenses = NOI
NOI / what it sold for = Captilization rate
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GROSS RENT MULTIPLIER |
Sales price / Rental Income - GRM GRM X Rental Income - Est Market Value |
