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