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39 Cards in this Set

  • Front
  • Back
appraisal process
process utilized to otain a reliable opinion of value
Identification of Real Estate
Legal Decrisption are most common way
Property Tax is
a form of restriction on property rights
Standard of Value refers
to the type of value the client expects (investment value, value in use)
Market Value
the most probable price which a property should bring in a competitive market
Effective Date of the Appraisal
Value estimates are always made on a specific date
Appraisals of past values
are often used in legal proceedings like divorce or tax audits
Appraisal of Future Value
Always speculative - impossible to predict the future
Appraisal report date
Does not directly effect value, it is the date the report is used.
Valuation Date
Date @ which value is estimated, commonly date that the property is inspected
Report Date
Date the appraisor completes & signs the report
Appraisal report date as opposed to the valuation date,
does not directly effect the value.
Scope of the appraisal
the amount of research and development that will be required
Assumptions
are facts app believes are true but does not verify
Limiting Conditions
is a statement or explination that limits the application of the conclusions in the report
assumptions and limiting conditions limit the
liablity of the appraisal.
Step two of appraisal process
Preliminary Analysis - there are 5 steps...
Step 1 - Preliminary anaylisis
Identfy the necessary data
General Data
pertains to R.E. values in general
Specific Data
Data about specific Property
Primary Data
Generated by the appraisal or other
Secondary Data
Data generated by others (puplished)
Step 2 -of preliminary analysis
Identify the source of the data
Step 3 of preliminary analysis
preliminary analysis - the app will identify relevent data
step 4 of preliminary analysis
creating a plan
step 5 of preliminary analysis
fee proposal
Step 3 of appraisal process
collecting, verifying & Analyizing data
Step 4 of appraisal process
Highest & Best Use Analysis
used for both improved and as vacant
Highest & Best Use important that land & improvements must be valued seperately...which approach
COST APPROACH
Site Valuation
est of the site less improvements
Site refers to a parcel of land that has been
improved by grading, clearing and providing access.
COST APPROACH
VALUE OF SITE PLUS IMPROVEMENTS LESS DEPRECIATION
DEPRECIATION
THE DIFFERENCE BETWEEN COST NEW VS CURRENT VALUE
SALES COMPARISON APPROACH
AKA MARKET APPROACH OR MARKET DATA APPROACH - VALUE OF SUBJECT IS INDICATED BY SALES PRICES OF SIMILAR PROP - THEY MUST BE TRULY COMPARIBLE
INCOME APPROACH
ASSUMES THAT THE VALUE OF PROPERTY IS INDICATED BY THE AMOUNT OF INCOME IT CAN GENERATE - THE HIGHER THE INCOME THE HIGHER THE VALUE.
GROSS RENT MULTIPLIER
MONTHLY INCOME FROM EACH COMP IS DIVIDED BY THE SALES PRICE
RECONCILIATION
SELECTING THE MOST APPROPRIETE METHOD OF THE THREE & GIVING THE MOST WEIGHT IN DET THE FINAL EST OF VALUE.
REPORTING THE DATA
1) THE NARRATIVE - MOST DETAILED FORM
2) FORM REPORT - MOST COMMONLY USED
3) ORAL
APPRAISAL PROCESS RECAP OF 8 STEPS
1) DIFINE THE APP PROBLEM
2) PRELIM ANALYSIS
3) COLLECT & VERIFY DATA
4) DETERMINE HIGHEST & BEST USE
5) EST VALUE OF SITE
6) APPLY 3 APPROACHES TO VALUE
7) RECONCILE & REACH FINAL VALUE ESTIMATE
8) PREPARE AND DELIVER APPRAISAL REPORT