Property Valuation And Appraisal

Front 1

____________ describes the fact that in real estate, the supply side tries to meet the demand side until their demand is satisfied.

Back 1

Competition

(Competition means that the supply side will constantly try to satisfy the demand side until there is a surplus on the supply side.)

Front 2

All property value is created by the __________ of the future benefits the property will provide.

Back 2

Anticipation

(People purchase real estate and set value in the present in anticipation that the value will increase in the years to come.)

Front 3

You should find a ____________ between land value and building value for any given property.

Back 3

Balance

(Land value and building value should be similar, as well as reflecting the land and building values of the neighborhood. Property values are maximized when balance is maintained.)

Front 4

___________ is the value placed on a property for tax purposes.

Back 4

Assessed value

(Assessed value is associated with the term as vapored, which means “according to the value”)

Front 5

When real estate characteristics are similar, the principle of _______ can help create and sustain value.

Back 5

Conformity

(Real estate value may be negatively impacted by improper or incompatible land usage)

Front 6

The principal of increasing and decreasing returns (diminishing returns) is based on the principle of ___________.

Back 6

Contribution

(Installing certain components in or on your property may increase its value, but repeatedly installing the same components will have less and less value)

Front 7

Because real estate stays in a fixed location, it is affected by ___________, which are everything that happens around the property.

Back 7

Externalities

(Externalities affect the value of a piece of property and can include but are not limited to: quality of surrounding schools, nearby gas stations, nearby job availability, mortgage rates, etc)

Front 8

____________ is the cost of choosing one investment over another, such as investing in real estate over a certificate of deposit in the bank.

Back 8

Opportunity Cost

(One of the goals of investing in real estate is making more money than you would have in a guaranteed investment, like a certificate of deposit)

Front 9

The ____________ principle states that “the whole is sometimes greater than the sum of its parts”.

Back 9

Plottage

(Putting multiple smaller properties together may increase the overall value of the larger piece of property by allowing new opportunities for land usage.)

Front 10

The principle of __________ states that the lower values of smaller homes tend to have a negative effect on the higher values of larger homes.

Back 10

Regression

(Regression is part of the old adage to “always buy the smallest house in the neighborhood.” The high values of larger homes will pull the value of smaller homes up.)

Front 11

The principle of _____________ states that the higher values of larger homes tend to have a positive effect on the lower values of smaller homes.

Back 11

Progression

(Progression is part of the old adage to “always buy the smallest house in the neighborhood.” The high values of larger homes will pull the value of smaller homes up.)

Front 12

The economic principle that states that a buyer will try to pay as little as possible for any given piece of property, as long as it suits his or her needs, is ___________.

Back 12

Substitution

Front 13

Because there is only a finite amount of resources, the law of ________ will increase property value because no more can be built in any one area.

Back 13

Supply and demand

Front 14

After a builder’s total costs of labor and materials, the difference between the cost and selling price of a piece of property is called ____________.

Back 14

Surplus Productivity

(Surplus Productivity is a fancy way of saying profit)

Front 15

Appraisers estimate property values by analyzing the sale of other similar properties called ____________.

Back 15

Comparables

(Analyzing values of similar properties can be called “comparables” the “sales comparison approach” the “market analysis approach” or the “market comparison approach”