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24 Cards in this Set

  • Front
  • Back

Market Value

Estimated price one can hope to achieve

Market Price

Actual money paid for a property (selling price)

Cost

Sum of all past expenses that have gone into bringing a property into being

Prerequisites to value

Demand, utility, scarcity, and transferability

Principle of Regression

The most expensive house loses value because of the association with less valuable properties

Principal of Progression

The least expensive property in the neighborhood gains value because of close by properties of greater quality

Plottage

Increase in value via assemblage

Letter of opinion

Informal report that simply states an appraisers opinion of value

Short form report

Used by lenders and government and consist of property and market characteristics as well as appraisers analysis and conclusions

Narrative report

The most comprehensive appraisal report and gives detailed support for the final estimate of value

Add to comp sale price

Comp inferior to subject property

Subtract from comp sale price

Comp better than subject property

Reconciliation

Weighted average of final adjusted comp sales prices

Unit in place method

Used in replacement analysis by estimating cost of each component of the building

Quantity survey method

Most accurate and reliable approach for calculating replacement cost and involves a detailed breakdown of everything that goes into a building

Accrued depreciation

Total lump sum dollar amount a property has depreciated since being built

Actual age

Historical age of the structure

Effective age

How old the property appears to be

Total Economic life

Effective age + remaining economic life

% of Depreciation

Effective age / total economic life

Principle of Anticipation

Core of the income approach to calculating value

Principle of substitution

Core of the cost and sales comparison approach to estimating value

Gross rent multiplier

Best used in residential rental appraisal and uses monthly rent to determine value

Gross income multiplier

Used to determine value of small commercial and residential of 5+ units and uses total annual income to determine value