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Chapter 6
Valuation
| Question | Answer |
|---|---|
| Property currently for sale. | Active property |
| Features of a property that adds value or desirability. Amenities can be either tangible such as a skylight or intangible such as an ocean view. | amenities |
| Future physical, economic, social, or political changes which may affect present value of property. | anticipation |
| An estimate or opinion of value based upon one or all of the following approaches to value: Market Data, Cost Approach, Income Approach | appraisal |
| An independent person trained to provide an unbiased estimate of value for a fee. | appraiser |
| An appraisal theory that a value placed on a property is good for only one snapshot in time because no physical or economic condition ever remains the same. | change |
| A benchmark used in the Market Data Approach to make a property value estimate based on other properties which have recently sold and are similar to the subject property in terms of location, physical features, price, and date of sale. | comparable properties |
| The maximum value of a property that is realized when the other properties in the neighborhood are similar. | conformity |
| Any component to a property is worth only what it adds to the property's value regardless of the cost of the improvement. | contribution |
| The current reproduction cost of a building plus the value of the land tends to set the upper limit of a properties value. | cost |
| A property that was listed for sale but that did not sell during the term of the listing contract. | expired property |
| The reasonable use that is most likely to produce the greatest net return to the land and/or buildings. | highest and best use |
| Improvements that are made to a property and the costs of those improvements are recovered upon sale due to the increased value of the property. Improvements made to a property and the costs of the improvements are not likely to be recoverable upon sale. | increasing and decreasing returns |
| A study of a property by a real estate agent or appraiser to establish a likely selling price of the property. It involves a study of recent sales in the market area which are similar to the subject property on the basis of location, terms, physical features and date of sale. | market analysis |
| The price a ready, willing and able buyer actually pays for a property. | market price |
| The price at which a property would sell in the open market to a buyer who is under no duress, is not related to the seller, is well-informed about the property and who has been found within a reasonable amount of time, payment is made in cash or its equivalent, price should be unaffected by special financing terms. | market value |
| A property that has an accepted offer to purchase with all the contingencies removed. | pending property |
| The value of a better property increasing the value of a lesser property. | progression |
| The value of a lesser property decreases the value of a better property. | regression |
| A reference to the real property under an appraisal. | subject property |
| Properties tend to be worth what an equally desirable or substitute property sold for. | substitution |
| Economic theory of pricing stating that demand increases price and that over-supply reduces price. | supply and demand |
Created by:
lisahale782006
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