Chapter 16: Appraisal Flashcards Preview

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Flashcards in Chapter 16: Appraisal Deck (24)
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1
Q

some extra that contributes to owner satisfaction; clean air, view, etc.

A

amenity

2
Q

an estimate of a property’s value by someone who has specific training as an appraiser

A

appraisal

3
Q

independent person trained to estimate value

A

appraiser

4
Q

the rate of return of a property produces on the owner’s investment

A

capitalization rate

5
Q

properties listed in an appraisal report of a CMA that are substantially equivalent to the subject property (aka comps)

A

comparables

6
Q

the process of estimating the balue of property by adding to the estimated land value the appraiser’s estimate of the reproduction or replacement cost of the building, less depreciation

A

cost approach

7
Q

in appraisal, a loss of value in property due to any cause including physical deterioration, functional obsolescence, and locational obsolescence. For income tax purposes, yearly write-off of percentage of the cost of a building as an expense

A

depreciation

8
Q

reduction in a property’s value caused by factors outside the subject property such as social or environmental forces or objectionable neighboring property.

A

external obsolescence

9
Q

a loss of value to an improvement to real estate due to becoming outdated, often caused by age or poor design

A

functional obsolescence

10
Q

analysis of income including rental and other factors

A

gross income multiplier (GIM)

11
Q

a figure used as a multiplier of the gross rental income of a property to produce an estimate of the property’s value

A

gross rent multiplier

12
Q

the possible use of land that would produce the greatest net income and thereby develop the highest land value

A

highest and best use

13
Q

analysis of value of property using return on investment

A

income approach

14
Q

what a property actually sells for

A

market price

15
Q

the probably price a ready, willing, able, and informed buyer would pay and a ready willing, able, and informed seller would accept, neither being under any pressure to act, and after allowing for a reasonable exposure on the market

A

market value

16
Q

loss of value due to wear and tear or action of the elements

A

physical deterioration

17
Q

the final step in the appraisal process, in which the appraiser reconciles the estimates of value received from the direct sales comparison data, cost, and income approaches to arrive at a final estimate of value for the subject property

A

reconciliation

18
Q

the construction cost at current prices of a property that is not exactly duplicate of the subject property but serves the same purpose or function as the original

A

replacement cost

19
Q

the construction cost at current prices of an exact duplicate of the subject property

A

reproduction cost

20
Q

the process of estimating the value of a property by examining and comparing actual sales of comparable properties

A

sales comparison approach

21
Q

location; buyer’s willingness to pay more for certain locations

A

situs

22
Q

parcel of real estate being appraised

A

subject property

23
Q

an appraisal principle stating that the maximum value of a property tends to be set by the cost of purchasing an equally desirable and valuable substitute property

A

substitution

24
Q

the power of a good or service to command other goods in exchange for the present wort of future rights to its income or amenities

A

value