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20 Cards in this Set

  • Front
  • Back
Carrying charges
expenses during lease-up or sell out including commissions, cost of capital, etc.
Contractor's profit
money paid to coordinate the subcontractors &/or construction of improvements
Cost approach
one of the 3 approaches to value where cost minus depreciation plus site value = value
Cost estimate
estimate of money necessary to build an improvement as of a given date
Curable depreciation
items that should be corrected or replaced as of the appraisal date
Depreciated cost
value of the improvements by subtracting depreciation from cost
difference between cost and value
Direct costs (hard costs)
money for labor & materials, including contractor's profit
Entrepreneurial incentive (profit)
money necessary to cause improvements to be built over and above direct & indirect costs
External obsolescence
loss in value from outside causes
Feasibility study
a study used to determine if a particular use should be developed or to select among alternative uses
Functional obsolescence
loss in value in the improvements from other than wear & tear; includes outdated items, superadequacies, deficiencies, poor layout, design, etc.
Functional utility
the ability of improvements to meet market required uses
Incurable depreciation
loss in value in the improvements from items that are not economically justified to correct or replace
Indirect costs (soft costs)
costs other than direct and profit attributable to building; includes architectural, interest, loan fees, money for lease-up, professional fees, etc.
Physical depreciation
loss in value due to wear & tear
Replacement cost
cost to build same functional utility at current workmanship & materials
Reproduction cost
cost to build a duplicate
Stabilized occupancy
occupancy at expected supply & demand stabilization or when the improvements are expected to remain occupied
Appraisal principles
1. Substitution
2. S & D
3. Balance
4. Externalities
5. HBU