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Flashcards in Appraisal - Need To Know Deck (11)
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1

Define:
Contribution

The appraisal principle which states that an improvement to a property must add its cost to the value.

2

What are the steps of the neighborhood cycle?

1. Growth or integration
2. Equilibrium
3. Disintegration or decay

3

When computing NOI, what is never included?

Debt Service

4

Define:
Economic Obsolescence
A.K.A. External Obsolescence

A form of depreciation caused by forces outside the property boundaries. They may be political or social factors. It is considered to be incurable.

I.e. A factory that emits smoke and Oder near a home.

5

In appraisal, is depreciation a credit against an income tax liability or simply a loss of value?

Loss of value.

6

What are the four essential parts of an evaluation?

1. Date
2. Property Description
3. Estimate of Value
4. Signature of the Appraiser

7

What are the four essential elements of value?
(DUST)

Demand
Utility
Scarcity
Transferability

8

What are the three forms of appraisal?

Letter form - quick and easy

Short form - a.k.a. Checklist, typically for residential properties

Narrative form - most extensive, typically for commercial properties

9

What is assemblage?
Plottage? Subdividing?

Assemblage is the process of joining two or more contiguous properties.
Plottage is joining two or more parcels of property to increase value.
Subdividing is braking property into smaller parts to increase value.

10

The purpose of capitalizing income, or income capitalization, is to:

Determine property value

11

What is the difference between reproduction cost and current value?

Depreciation