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10 Cards in this Set
- Front
- Back
Define value. |
What property will command in exchange for goods, services or money. |
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Market value is... |
What an able and informed buyer will pay and an able and informed seller will accept if property is offered on the market. |
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Subjective value is... |
A personal view of value by the buyer or seller. |
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Three causes of depreciation |
1. Physical deterioration 2. Functional obsolescence 3. External (economic) obsolescence |
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What are examples of physical deterioration? |
Normal wear and tear Lack of maintenance Dry rot and termites Action of the elements |
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Examples of functional obsolescence |
Poor architectural design Outdated floor plan Insulation Lack of modernization Building deficiency |
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Examples of external obsolescence |
Neighborhood hazard Misplacement of an improvement Change of locational demand Proxmity of nuisances |
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Assessed value is... |
A percentage of value used to calculate ad valorem taxes. |
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Loan value |
A percentage of the sales price or appraised value, whichever is less, that the lender will loan. Also called loan to value ratio. |
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Book value |
The adjusted cost basis from which a capital gain or loss is calculated when the property is sold. On property used in trade or business, it is the cost plus capital improvements less depreciation. For a residence it is the cost plus capital improvements. |