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60 Cards in this Set

  • Front
  • Back
Absolute adjustment
the amount of an adjustment ignoring all minus signs
Adjusted sale price
the indicated value of a property after adjustments
Adjustment grid
a type of market data grid; a sales comparison approach technique where comparables are compared to the subject & adjusted to indicate a value for the subject after comparing comparables and finding adjustment amounts. THe sales that are different from the subject are adjusted; inferior sale's features are adjusted upward (+) & superior sale's features are adjusted downward (-)
Arm's length transaction
a transaction that meets the definitional requirements of market value, particularly with regards to no duress, buyer & seller acting independently & acting in their best interests
narrowing a possible range of value by setting lower & upper limits of value
Cash equivalency
the price as if the terms of a transaction did not affect the price
Comparative analysis
a qualitative sales comparison technique where properties are compared to the subject without quantifying adjustments
Conditions of sale
an element of comparison after financing & before expenditures made after purchase for usually motivation or some other reason the sale does not match the motivational requirements of a particular value definition used in an appraisal
Data array grid
a type of market data grid which summarizes important comparable factors in summary form; it is used for display, not adjustment
Dollar adjustments
adjusting on the basis of $ amount adjustments
Economic characteristic
attributes of a property that affects the income, e.g. operating efficiency, management, lease terms
Elements of comparison
adjustment factors including property rights conveyed, financing, conditions of sale, expenditures made after purchase, market conditions, etc.
Expenditures made after purchase
$ spent after purchasing a property; an element of comparison
Financing terms
the terms of the debt capital used for the purchase of property
Graphic analysis
analyzing comparable on using a visual tool (generally a 2-dimensional graph)
Grouped data analysis
a quantitative method of sales comparison where groups are studied in pairs of independent variables (e.g. date of sale, size) to ID dependent variables (e.g. price psf)
an element of comparison, adjusted as of the date of the appraisal (after market conditions)
Market conditions
an adjustment for the change in market conditions from the date of sale to the date of the appraisal
Non-realty components of value
part of the sale price attributable to either tangible personal property or intangible values
Paired data analysis
deriving adjustments by comparing two comparables that are similar except for one feature
Percentage adjustments
use of a %, as opposed to a $ amount to adjust a comparable
Physical characteristic
an element of comparison done after market conditions for physcial differences between the comparables & subject
Property rights conveyed
the first adjustment in the adjustment process to adjust the propert rights transferred to make them = to the property rights appraised
Qualitative analysis
analyzing comparables without quantifying the adjustments or indicating a value from some other quantitative means
Quantitative analysis
adjusting to value using a method that either shows the adjustment or uses some other mathematical or modeling to show the indicated value for a property
Ranking analysis
a qualitative technique to derive value where the sales are ranked from worst to best or best to worse & the subject analyzed within the array
the process leading to the conclusion of a value range or estimate
Relative comparison analysis
use of inferiror, superior, or equal in analyzing sales without resorting to quantifying adjustments
Sales comparison approach
one of the 3 approaches to value; sale price of comparable +/- adjustments = value of subject
Secondary data analysis
a quantitative technique where data, other than comparables is used to indicate a value for the subject (for example market studies, traffic counts, desirability ratings, etc.)
Sensitivity analysis
a quantitative technique of sales comparison used to isolate the effect of 1 variable on value change
Sequence of adjustments
the order the adjustments should be made
Statistical analysis
a quantitative technique of sales comparison using inference, regression, or other statistical analysis of data
Transactional data
sales, rentals & other contractual information between parties
Trend analysis
a quantitative technique of sales comparison used on large quantity of data to show market changes over time
Units of comparison
the comparative basis for analyzing sales, e.g. per sf, per room, per unit, or even per lot, or per house, etc.
an adjustment, after market conditions, for differences in how a property is utilized
a public restriction on real estate from the exercise of police power
Elements of comparison
1. Real property rights conveyed
2. Financing
3. Conditions of Sale
4. Expenditures made immediately after purchase
5. Market Conditions (Cumulative)
6. Location
7. Physical characteristics
8. Economic characteristics
9. Use (zoning)
10. Non-realty items (Net out above)
1. Paired data analysis
2. Grouped data analysis
3. Statistical analysis
4. Graphic analysis
5. Sensitivity analysis
6. Trend analysis
7. Cost analysis
8. Secondary data analysis
9. Direct comparison
10. Capitalization of rent differences
1. Relative comparison analysis
2. Ranking analysis
3. Personal interviews
Relationship to appraisal principles
1. S & D
2. Substitution
3. Balance
4. Externalities
Sales procedure
Select sales, listings, offerings
Verify info
Select units of comparison
Adjust for elements of comparison
Reconcile various methods
Paired data analysis
process of mathematical deduction; the difference between otherwise identical comparables
Grouped data analysis
grouping by independent variable, such as date of sale, & studying pairs to ID dependent variables
Statistical analysis
inference & regression
Graphic analysis
visual interpretation of a graphic display of data
Sensitivity analysis
isolating effect of 1 variable on value
Trend analysis
applicable with large amounts of data; elements of sale price are studied to determine market sensitivity
Cost analysis
cost used as a basis of adjusting
Secondary data analysis
other data is used as a basis for inferring directions & amounts of adjustments
Direct comparisons
similar in all but 1 factor, the difference is the adjustment
Quantitative example
Capitalization of rent differences
Relative comparison analysis
state if inferior, superior or equal
Ranking analysis
arraying from highest to lowest price & placing subject where it belongs
Personal interviews
with brokers or others knowledgeable
Percentage adjustments
- the subject is 10% superior to the comparable
S = 1.10 C
% adjustments
- the comparable is 10% superior to the subject
C = 1.10 S;
S = C/1.10
% adjustments
- the subject is 10% inferior to the comparable
S = .90 C
% adjustment
- the comparable is 10% inferior to the subject
C = .90 S;
S = C/.90