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N9
| Term | Definition |
|---|---|
| Appraisal | estimate/opinion of value supported by facts |
| Value | worth (DUST) |
| Demand | overall desire and purchase power |
| Utility | functionality/meets a need |
| Scarcity | availability (shortage or demand) |
| Transferability | deed |
| Market value | amount willing buyer will pay/willing seller will take (no duress) arms length sale |
| Market price | actual amount paid for property |
| Cost | Amount of $ required to produce an item (building) at todays prices |
| Principal of highest and best use | the use of property which will produce highest Net return |
| Excess land | not needed to support highest and best use |
| Principal of substitution | max value of a prop how much it will cost to buy an equally desirable property |
| Principal of conformity | value more stable in area where high % of conformity |
| Principal of regression | presence of lesser properties adversely affects value of greater properties |
| Principal of contribution | value of component part is determined by how much it adds/detracts from value of whole |
| Principal of change | real estate values change (social/economic affect value) |
| Principal of development, equilibrium, disintegration | principal goes through phases of growth, stability and decline |
| Principal of competition | profit tends to breed competition which can reduce profit |
| Principal of anticipation | value affected by expectation of future events |
| Appreciation | increase in value for any reason |
| Earned increment | you put in effort (roof, pool, garage..) |
| Unearned increment | you didnt do anything |
| Plottage (assemblage) | increase in value by combining small parcels into 1 ownership |
| Depreciation | loss in value for any reason |
| Deterioration | loss in value from wear and tear |
| Deferred maintenance | accumulated deterioration |
| Rehabilitation | curing deferred maint. |
| Functional obsolescence | loss due to outdates fixtures, poor design, tech advances |
| Economic obsolescence | no cure |
| Comparison approach/Market data/Direct sales | estimating value by comparing to similar properties |
| Cost approach/summnation | building cost-depreciation+land value=appraised value |
| Replacement cost | cost to duplicate at todays prices |
| Reproduction cost | cost to exactly duplicate at todays prices |
| Square footage of living area |
Created by:
bronny
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