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