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Fundamentals of REA

REA

QuestionAnswer
refers to assets not intended for use on a continuing basis in the activities of an entity current assets
refers to tangible and intangible assets,such as property, plant, machinery and equipment non-current assets
legal concept, encompassing all the rights, interests and benefits related to ownership which entitles the property owner to a specific interest on what is owned Property
is created by the real estate's utility or capacity to satisfy needs and wants of human societies value
valuation of land, buildings, plant, equipment and machinery generally for incorporation into business accounts Asset Valuation
any person directly engaged as a principal in the business of buying, selling, or exchanging real estate property whether on a full time or part time basis Real Estate Dealer
refers to the best practices in the valuation industry Generally Accepted Valuation Principles
value is the relationship of market price and value. the normal value under conditions of balanced supply and demand. subjectivity, scarcity and utility Theories of Austrian school
value refers to objectivity, value in use, value in exchange Cost Theory of Adam Smith
argued that increases in population would outgrow increases in the means of subsistence. emphasized the supply and demand factor Scarcity Theory of Malthus
argued that the economic value of a good or service is determined by the total amount of socially necessary labor required to produce it, rather than by the use or pleasure its owner gets from it. A mere congelation of homogeneous human factor Labor Theory of Karl Marx
an economic theory and practise where the government seeks to regulate the economy and trade in order to promote domestic industry. subjective desires of the factor in value Theories of the Mercantilists
states that unearned increment of land abolished through taxation. land value increases indefinitely Social Theory of John Stuart Mill
laid the foundation of today's concept of economic rent. agricultural labor Theories of the Physiocrats
The quantity of land is limited, and so is its productiveness, and it is not uniform in quality. determined by scarcity Rent Theory of Ricardo
Factors/Forces that affect Appraisal Political, Economic, Physical, Social
related to population growth, birth control measures and migration or the demographics Social
Characteristics/Determinants of Value in Appraisal Demand, Utility, Scarcity, Transferability
refers to the desire couple with the financial capacity of the buyer to acquire a piece of real property Effective Demand or Purchasing Value
refers to the intended use Scarcity
refers to the quality of the property to be transferred or covered Transferability
the present worth of all the rights and future benefits accruing ownership and use of real property Principle of Anticipation
value of a property will reach its maximum level when the factors of production are in balance. term used to describe a combination of land uses which maximizes land uses Principle of Balance
the inevitable and constant factor affecting the possible increase in the value of the property like cities, neighborhoods, natural phenomenon, changes in market place Principle of Change
refers to the industry competition which arises from profits Principle of Competition
refer to factors/forces where the property cannot be valued on the basis of one use for land and another use for improvements Principle of Consistent Use
refers to the principle of increasing and decreasing returns applied to a portion or the whole of an improvement Principle of Contribution
provides exterior influences of a property that may have a positive or negative effect on its value Principle of Externalities
states that two recently sold properties were selected for their similarities that maybe compared to determine the value of dissimilarities Principle of Heterogeneity
the primary consideration of all the factors that influence market value Principle of Highest and Best Use
states that value of investments chosen can be measured in terms of the value of investment options or opportunities foregone Principle of Opportunity Cost
connotes diminish value through disadvantages anticipated in the future Principle of Regression
refers to the factors/forces where the value is increased if supply is reduced by effective demand, resulting in scarcity Principle of Supply and Demand
net income remaining after the cost of labor, capital and coordination have been paid Principle of Surplus Productivity
the meeting of the desires and requirements of human beings not only the capacity to give satisfaction in use but also the power to excite desire for continued possession Principle of Utility
type of appraisal which is performed by structure of judgment reached by the collection and analysis of relevant data commonly reported in writing thru a narrative report performed by a licensed REA Formal Appraisal
an estimate of value based on untrained knowledge of value, which conclusion was reached using intuition or suspicion, past experience and broad-spectrum knowledge Informal Appraisal
power of goods in exchange for the present worth of future rights to its income or amenities. desirability of a property on account of its absolute or relative use Value
is necessary in the appraisal assignment which will determine the extent of the research and analysis that the appraiser will have to perform on the assignment Scope of Work
law that governs the real estate appraisal in the Philippine Jurisdiction Real Estate Service Act of the Philippines
Appraiser should maintain to possess competence, skills, integrity, sound judgment, experience, depth study
Contributing to such value are real estate's general uniqueness, durability, fixity of location, relatively limited supply, specific utility
reflects the combined influence of all market forces that come to bear upon the value of property Utility of Real Estate
when land is improved by the addition of streets, utilities, sewers and other services, it becomes a site
anything permanently attached to the land. It includes natural things that are attached by roots and man-made things (fences and buildings) Fixture
under the PVS, what are the two types of values? Economic Value and Market Value
items owned and attached to a rented premises/space or building by the tenant and used for business purposes Trade Fixtures
are resources controlled by an entity as a result of past events and from which some future economic benefits are expected to flow to the entity Assets
stocks, obligations, short-term investments, real estate inventories for developers, cash in bank, cash on hand Current Assets
assets intended for use in an entity's continuing activities including land and buildings, plant and equipment and other categories of assets less accumulated dep. Tangible Property, Plant, Machinery, Equipment
long-term investment, long-term receivables, goodwill, expenditures, patents, trademarks, management and skill, credit rating, copyrights, franchises, contracts Intangible Non-current assets
adjustments made to the cost of reproducing or replacing the asset to reflect its physical and functional deterioration and external obsolescence in order to estimate the asset/property value in a theoretical exchange Depreciation
is a representation of its market-recognized utility rather than its mere physical status Market Value
can be local, regional, national or international. Each party will respond to the supply and demand relationships and other price-setting factors as well as the party's own capacities and knowledge, understanding of the relative utility of the goods Market
Market place analysis of real estate must include _________ on the area's residence demographic data
refers to the scientific study of population statistics-births, deaths and marriages. Demography
refers to the study of the overall market area Segmentation
standards that conform to the generally accepted valuation principles and internationally accepted standard practices Philippine Valuation Standards
term used for the amount asked, offered, or paid for a good/property service Price
price paid for goods/services or the amount required to create/produce the goods or services Cost
indicates the value of the property traded in the market Value in Exchange
is a use that was legally established and maintained but no longer conforms to the existing zone legally non-conforming use
refers to the sum of the asset accounts less provision, depreciation, depletion and amortization minus the liability accounts shown on the balance sheet Stockholder's Equity
prescribes the adoption of the International Valuation Standards under the Philippine setting known as the Philippine Valuation standards-1st edition Department of Finance Order No. 37-09 dated Oct. 19, 2009
considered to be the basis of the property valuation procedure and is applicable to the aspect of land reform program and legislative reforms as well as the Appraisers/Valuers professional services or engagement and their cpd Philippine Valuation Standards
provides guidance on specific appraisal /valuation issues and how standards/principles are to be applied in more specific trade and service providing situations PVS Guidance Notes
Perform professional service with Fidelity, Accountability, Respect, Sincerity, Utmost Integrity, Courtesy
Strictly adhere to the code of ethics with Honesty, Professionalism, Good Conduct, Strong sense of values
Standards and Ethics. Endeavor or make an effort to present full disclosure of relevant and material information pertaining to appraisal assignment As to public relationship
Standards and Ethics. Charge and collect the standard professional fees which are fair and reasonable based on the time spent/required to complete the assignment, professional competence, in accordance with professional/industry practice As to client's relationship
Standards and Ethics. Not to use any vital documents relative to the professional conduct of the colleagues without written consent As to colleagues/fellow professional's relationship
Standards and Ethics. Any form of electioneering should not be allowed or toleration As to the PhilRes-AIPO
Real Estate Appraisers should indicate the Prof Identification card number and validity, PTR number and validity, PhilRES AIPO number and official receipt number (ARN) and its validity
Doing table appraisal/valuation unethical practices
Prepares and prescribes the Code of Ethics AIPO
Adopts the Code of Ethics PRBRES
deals with the ethical and competency requirements of the Appraisers/valuers in the real estate appraisal practice Code of Conduct
serves the public interest, sustains the trust of financial institutions. Ensures that the results of appraisal/valuations are reliable, consistent and unbiased Ethical Conduct
The physical environment and its cultural features comprise the geographic environment
the different types of settlements as well as the transportation and production are collectively called cultural environment
also called as Greek word "geographia" means earth description Geography
systematic study of the origin, distribution, and significance of the major physical features of the earth such as land forms, climates, topography, oceans, geographic arrangement of people and natural resources Physical Geography
study of land and water forms as well as the development of irregularities in the surface of the earth Geomorphology
It considers wind movements, cloud formation, temperature changes and precipitation of all kinds Climatology
refers to the accurate measurements of the earth and the calculations of the exact location of points on the earth's surface. ex. exact location of a city in latitude and longitude Mathematical Geography
studies the relationship between plants and animals and their habitat or natural environment Biogeography
study of oceans, wave activity, temperature difference, tides Oceanography
study of relationship between disease-causing organism and their physical environment Medical Geography
deals with the process of soil formation Pedogenesis
studies the soil Pedology
basic soil sampling unit that is often viewed as a soil profile that goes from the surface to a depth where soil meets bedrock Pedon
deals with the study of hydrosphere Hydrology
describes the waters of the earth Hydrosphere
scientific study of the atmosphere and its associated phenomena. Meteorology
vast gaseous envelope of air that surrounds the earth atmosphere
refers to the study of man's imprints upon the earth, such as the distribution of population, various settlement patterns and the features resulting from man's productive activities in earning Human or Cultural Geography/Anthropology
Created by: sanx