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13 Cards in this Set
- Front
- Back
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Market Data, Income, cost |
Three methods of appraisal |
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Market data approach |
Comparison with known sales of other comparable properties. The principle is substitution - no one will pay more if the same thing is available cheaper |
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Income approach |
Appraisal approach using capitalization of net income, used on commercial and investment properties |
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Cost approach |
Used for special purpose properties when no comps are available and no income is produced by property. The only approach that uses depreciation. Based on the property's reproduction or replacement cost. Appraisal by summation |
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Physical deterioration, functional obsolescence, economic obsolescence |
3 factors of depreciation |
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Functional obsolescence |
Cause by relative loss of a building's utility. Often uncurable, such as office building that will not accomodate central air |
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Economic obsolescence |
"External obsolescence", brought about by social, environmental, or economic factors outside the property ex: noise, polution |
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Reconciliation |
Final step in an appraisal process in which appraiser reconciles estimates of value received from market-data, cost, and income approaches to arrive at final estimate of market value |
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Competitive market analysis |
Written report prepared by agent to assist sellers and buyers with determination of listing prices and offering prices Not an appraisal |
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Homes sold, homes on the market, homes pending sale, and analysis of expired listings |
Types of listing included in CMA |
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Financial Institutions Reform, Recovery, and Enforcement Act 1989 |
Requires that a licensed or certified appraiser be used to do any appraisal in connection with a federally related transaction of 250k or above |
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Uniform standards of professional appraisal practice |
USPAP - Quality control standards applicable for real property analysis and reports in the US |
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Member of appraisal institute |
MAI - designation given to appraisers experienced in evaluation of properties, and who can advise clients on real estate investment decisions |
