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24 Cards in this Set
- Front
- Back
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is unbiased written estimate of the fair market value of a property, usually referred to as subject property, at a particular time.
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appraisal
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is the document the appraiser submits to the client and contains the appraisers final estimate of value, the data upon which the estimate is based, and the calculations used to arrive at the estimate.
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appraisal report
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Buyers
Sellers Corporate acquisitions, mergers or dissolutions Courts -Divorces -Eminent domain cases -Settlement of estates -Bankruptcy Mortgage Lenders |
users of market value appraisals
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• Few transactions available to indicate value
Every property is unique • Unique location • Many and varied attributes Large value of the asset makes errors costly |
reasons why appraisals are necessary
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its most probable selling price, assuming normal sale conditions. Also it can be view, as the value typical (imaginary) participants would place on a property.
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market value
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-------------- rests upon the willingness buyers and sellers freely bidding in competition with one another.
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o Market value
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is the value a particular individual (investor) places on a property.
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investment value
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o A buyers investment value is the ------------- that he/ she would be willing to pay for a particular property.
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maximum
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o A seller’s investment value is the ------------- he/she would be willing to accept.
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minimum
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are the prices we observe on sold property. Prices actually paid for a specific property.
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Transaction price
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o We observe a transaction only when the investment value of the buyer ------------- the investment value of the seller.
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exceeds
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are required and followed by all states and federal regulations.
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Uniform Standards of Appraisal Practice (USPAP)
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the general frame work or process real estate appraisers follow to comply with USPAP.
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Define the Problem, Selection and collection of data, Highest and best use, Estimate value by three methods, Reconcile resulting values, Prepare appraisal report
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the appraiser weighs the relative reliability of value indicators for the property being valued.
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Reconciliation
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final price after reconciliation of the answers obtained from two or more approaches.
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Final value estimate
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the price paid for a comparable property in the sales comparison approach, adjusted for all conditions and characteristics to approximate the subject property and the current date.
• The final price for each comparable property reached after all adjustments have been made. |
Final adjustment sale price
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Appraiser evaluates and reconciles the final adjustment sale prices of the comparable properties into a single indicated value.
Basic Idea: The final price from each appraisal approach. |
Indicated value
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a transaction between two parties that have no relationship with each other and who are negotiating on behalf of their own best interest. A fairly negotiated transaction and reasonably representative of the market value.
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arms-length transactions
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: additions or subtractions from a comparable sale price or cost which are required to make the comparable property more directly comparable to the subject property
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adjustments
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concerns nature in terms of the deal
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transactional adjustments
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result from general price inflation (Or deflation) or changes in local conditions of supply and demand.
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3. Market conditions
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the value movements attributed to changes in market conditions are best estimated by tracking the prices of individual properties as they sell repeatedly over time.
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• Repeat-sales analysis
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the transaction price of a comparable property adjusted fro non0market financing and non-arms length bargaining (conditions of sale)
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• Normal sales price
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“Normal sales price” adjusted for change in market conditions between the date of sale and the date of appraisal of the subject property
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• Market-adjusted normal sale price
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