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41 Cards in this Set
- Front
- Back
Appraiser |
A person who is engaged in the procedures of developing an opinion of the value of property |
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Appraisal |
An opinion of value |
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Value |
the task in appraising that consist in the understanding of the concept of worth, capacity, and price |
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Value in Use |
Relates to the importance of a property to a specific individual |
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Value in Exchange |
The term used to express the power of one item in purchasing another |
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Market Price |
The selling price of a property |
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Market Value |
An opinion of the price for which property will sell |
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Principle of Contribution |
A principle that holds the value of a component part of a property depends upon how much it contributes to the value of the whole parperty |
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Principle of Change |
A principle that holds that everything is in a state of continuous movement, change, development, decay and disintegration |
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Principle of competition |
A principle that holds that profits breed competition and excess profits breed ruinous competition |
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Principle of Supply and Demand |
A principle that holds that the scarcer the supply, the greater the value. If demand is constanct, an increase in supply will invariably reduce price |
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Principle of Highest and Best Use |
A Principle that holds that the value of a property is greatest when it is adapted to that use which, at a given time, is leagal, feasible, will yield the highest return, and will continue in demand in the foreseeable future. |
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Principle of Prograssion |
A principle that states that propeerties of higher values will enhance the value of less desirable properties in ther proximity |
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Principle of Regression |
A principle that suggests that properties of lower value will adversely affect the value of better properties in their proximity |
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Principle of Anticipation |
A principle that suggest that the perceived by purchasers in the market to be the future (anticipated) benefits of ownership, not the price paid for it in the past or the cos of its creation |
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Principle of Balance |
A principle that holds that optimum value is achieved when there is an economic valance in the factors of production, ie rents, wages,investment, and management and entreprenurial effort |
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Principle of Plottage and Assemblage |
A principle that holds that the consolidaiton of adjacent lots under different ownership into the common ownership of one larger unit results in imroved usability and increased value |
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Purpose of an Appraisal |
The specific type of value being sought |
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Function of an Appraisal |
The use of the appraisal |
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Sales Comparison Approach |
A method that compaires the subject property with similar properties, in the same or competing areas, which have been recently sold or are currently on the market |
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Principle of Substitution |
An approach that is based on the priciple of the maximum value of a property is determined, to a considerable extent, by the cost of the timely acquisition of a substitue property |
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Cost Approach |
An approach that is the opinion of th evalue of the land is developed separately then added to the cost of all improvements minus the estimated accrued deprecation. |
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Comparative Unit Method |
Cost-per-wquare-foot or per-cubic-foot as a comparative unit of measure is offten used to estimate cost |
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Physical Deterioration |
Any impairment of the physical condition of the property through age, use, and the action of the elemnts. |
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Functional Obsolescence |
A depreciation loss caused by overcapactiy, inadequacy, or inefficient design, as of the date of the appriasal, from the cost of the property new |
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Eternal Obsolescence |
The result of external causes, such as changes in the character of the area |
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Gross Rent Multiplier |
The number which reflects the ratio between the sales price of a property and its monthly unfurnished rental |
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Gross Income Multiplier |
The number between the sales price of a property and its annual rental |
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Capitalizaiton |
A process to convert a future net income stream into an opinion of present value |
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Capitalizaition Rate (Cap Rate) |
An allowance for interest to be earned on the capital investment, as well as an alllowance for capital recapture |
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Return ON the Investment |
The interest return portion of the Cap Rate |
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Return OF the Investment |
the allowance for recapturing the investment |
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Gross Potential or Gross Schedules Income |
The total annual rental income a property would earn if 100% of the space or property were rented |
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Vacancy |
The rent not collected because the property was not rented |
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Operating Epencses |
The normal, recurring expenses of owning and using the property to generate gross income |
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General Data Requirements |
The geral or indirect forces which affect the value of the property but are external to the specific property |
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Specific Data Requirements |
Decriptive information on the property site, as well as improvements |
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Recording |
reducing the collected ata to writing or some form of graphical representation, and then grouping related items together |
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Evaluation |
Appraisal of the data collected as a basis for its subsequent interpretation and includes a determination of the information's relevancy, accuracy, completeness, and the reliability of the sources |
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Interpretation |
The probable meaning of the evaluated information and is the result of critical judgment and involves analysis and intergration |
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Reconciliation |
The final step in the appraisal procedure and is the appraiser's overal determination based on the the appraiser's knowledge, experience, judgment, and analysis of all the information colected and processed |