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Core Course Terms
ISA Core Course Terms
| Answer | Term |
|---|---|
| an insurance term usually defined as replacement cost new less depreciation depending on your jurisdiction ) It is often interchanged with the term market value | |
| Addendum | -Third Part of Appraisal Report - Contains Supporting Documentation for information found in the appraisal report's Cover Document and Body - Includes, but not limited to, appraisers qualifications,photographs, working bibliography, tests, etc. |
| Administrator (or Administratrix) | of a decendent's estate is usually one who is appointed by the count if the descendent had no will existent, if no executor is names in the will, or if the named executor cannot or will not serve |
| Advocate | One who pleads on another's behalf, one who speaks in favor of, one who argues a cause, a supporter, a defender |
| Appearance Allowance | A Settlement offered When the damage is not very severe and does not detract from the utility of the object nor significantly from its appearance. Usually, repair attempts would not be successful or would be impractical. Owner keeps item. |
| Appraisal | (noun) The act or process of developing an opinion of Value. (adjective) of or pertaining to appraising and relating functions such as appraisal practice or appraisal services. |
| Appraisal Practice | Valuation Services Performed by an Individual Acting as an ________, including but not limited to ________ and _______ Review. |
| Appraisal Review | The Act or Process of Developing and Communicating an opinion about the quality of another appraiser's report |
| Appraiser | one who is expected to perform valuation services competently and in a manner that is independent, impartial, and objective |
| Appreciable Personal Property | Property that Increases in Value or Price over time because the public perceives it to be worth more |
| Approach to Value | An Acceptable Method for measuring value or cost of property. There are three _________s: sales comparison, cost, and income. |
| Three Approaches to Value | Sales Comparison Cost Income |
| Arm's Length Transaction | One, which is conducted within the open market freely and wothout abnormal pressures, such as collusion between buyer and seller |
| Artificial Market Effect | Results in price increased caused by either an artificially created decrease in the supply of an item, or an artificially caused increase in the demand, i.e. market tampering. |
| Assignment | Valuation Service that is provided by an appraiser as a consequence of an agreement with a client |
| Assignment Conditions | Assumptions, Extraordinary assumptions, hypothetical conditions, laws and regulations, jurisdictional exceptions, and other conditions that affect scope of work. |
| Assignment Elements | Specific Information needed to identify the appraisal or appraisal review problem: client and any other intended users; intended use; type and definition of vakue; effective date, subject property and assignment conditions. |
| Betterment | An insurance term that refers to the incremental increase in market value due to a repair or replacement, which renders the property more valuable than prior to damage or loss. |
| Bias | Preference or inclination that precludes an appraiser's impartiality and objectivity in an assignment |
| Blockage | Discount applied to value to reflect the depressive effect on vakue caused by the sudden offering for sale of a large number of identical or very similar items at the same time.In such a case, the market doesn't absorb items quickly and value drops |
| Body | Part of the appraisal report that is required in all appraisals and contains item specific information. |
| Broad Evidence Rule | Gives Consideration to All Aspects of Value rather than simply "replacement cost less depreciation", Thr objective is to compensate for actual loss and the appraiser may have to present all the evidence for another to make a reasoned settlement. |
| Bundle of Rights | All the _______, privileges, and obligations associated with Ownership |
| Buyer's Cost | The cost a purchaser would most likely have to pay in order to purchase the subject item |
| Catalogue Raisonne | An Attempt to record in book form (complete with images and descriptions) the total body of an artists work |
| Chattel | An article of personal property aw opposed to real property |
| Client | The Party or Parties (individuals, groups, entity) who engage an appraiser by employment or contract in a specific assignment, whether directly or through an agent. |
| Collection Effect | States that the Value for a group of items may be higher than the sum of the values for each individual in the __________ |
| Comparable Property | A Property having qualities and characteristics sufficiently similar to the property in question that it warrants comparison for valuation purposes. |
| Condition | Refers to the physical state of the property as it related to giving the expected results. _______ takes into consideration normal wear and tear, repairs, alterations, completeness, restorations, and conservation. |
| Confidential Information | not otherwise publicly available, provided in the trust that the recipient will not disclose it to another |
| Consulting | The act or process of proceeding information that does not include value determinations or cost estimates. It could be a marketability study, an authentication, or any other advice offered to a client. It is not the same as an appraisal. |
| Cost | The actual or estimated amount required to create, reproduce, replace, or obtain a property. Cost may be equal to value but is not synonymous with value. _____ has varying meanings such as "buyer's ____" and "manufacturing ____." |
| Cost Approach | Analyzes Comparable ____ Data as are available to replace the property being appraised with a suitable substitute |
| Cover Document | A Required element of all appraisal reports and contains unique, APPRAISAL -SPECIFIC information found nowhere else in the appraisal report. The _________ is an integral part of the appraisal report. |
| Current Appraisal | Occurs when the effective date of the ________ is contemporaneous with the date of report. |
| Date of Inspection | The Date on which the appraiser examined the property. |
| Date of Report | The date on which the appraisal document is prepared and the certification is signed. Sometimes called the issue date |
| Demand | the amount of any commodity the buyers are willing and able to buy at a given time for a given price. |
| Depreciable Personal Property | Property that decreases in value on process over time, which may be due to perceptions in the marketplace or the actual consumption, use of the item. |
| Depreciation | A Property's loss in value for any reason, internal or external to the item. |
| Diminution of Value | The Degree to which an item has lost worth because of damage and subsequent professional repair/restoration. |
| Distress (forced) Liquidation Market | Any market circumstance where property is sold quickly, within a very restricted time frame, without the freedom to consider exposure or price and, often, without regard to the most appropriate marketplace |
| Distress Sales | take place in markets that may or may not be the most appropriate (i.e. most lucrative) market. The property is sold immediately by a seller under compulsion to exchange property for cash. |
| Domestic Value | Is A U.S. Customs Service term which means the price at which such or similar property is freely offered for sale at the time and place of appraisement, in the same quality and quantities as seized, and in the ordinary course of trade. |
| Due Diligence | Is a concept that applied to all phases of the appraisal process - both in the development of the appraisal as well as in the reporting of the results. |
| Earnings Forecast | Is an Estimate of the Future net monetary returns of investment property that is owned |
| Economic Obsolescence | The passing out of usefulness due to external factors such as a decrease in demand (style, vouge, fashion), the establishment or restrictive uses, or a prohibitive increase in the cost to manufacture. |
| Effective Date | the appraisal is the date to which an appraiser's analyses, opinions and conclusions apply, e.g. the date of loss in the case of an insurance claim or the date of donation for income tax purposes. |
| Evaluation | the process of determining the non-monetary qualities of property that contribute to value |
| Executor (or Executrix) | A Descendants estate is the person named in a descendants will to administer the estate and distribute properties as the descendent has directed. |
| Extraordinary Assumption | Is an assignment- Specific assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser's opinions or conclusions. |
| extrinsic | not forming an essential part of a thing; extraneous; inessential; originating from the outside; external to. |
| Fair Market Value (FMV) | Defined by legal jurisdiction. varies w/ individual jurisdictions. Federal uses In the US such as estate, gift tax, donation, fmv is the most probable price at which property would be to buy or sell, both having reasonable knowledge of all relevant facts |
| FMV Canada | Highest Price, expressed in terms of money, that the property would bring in an open and unrestricted market between a willing buyer and a willing selling who are knowledgeable informed and prudent and who are acting independently of each other |
| Fiduciary | A person who stands in a special relation of trust, confidence, or responsibility in his or her obligations to others as does a company director or an agent of a principal. Appraisers are NOT ________! |
| Fonds | Group of Documents from the same origin and occurred naturally as the daily workings of an agency, individual, or organization. Ex. writings of a poet that were never published or the records of a institution during a specific period. |
| Forced Liquidation Value | The most probable price at which property would change hands is sold within a very short period of time without considering the marketplace. |
| Fractional Appraisal | An Appraisal in which a value estimate is made on one of the component parts or a percentage of an item without regard to the effect of the component's separation from the whole. |
| Functional Obsolescence | Passing out of usefulness due to the inability of the item to produce the desired results (due to inadequacy, unattractive style, poor or inefficient design, etc) and to the availability of a new replacement capable of achieving the same results. |
| Genre | A Category of art distinguished by a definite style, form, or content, a style of painting depicting scenes and subjects of common everyday life. |
| Goodwill Allowance | Term Used in the Claims Industry to describe a payment made to the shipper (or insured) that compensates for what the industry considers to be only a perceived loss, damage, or inconvenience. |
| Guardianship | A process where someone is appointed to manage the affairs of someone else because the person is unable to conduct them on their own behalf. |
| Highest and Best Use | The reasonable and legal use of a property that will result in its greatest value. _________ recognizes the need to consider the item's ultimate use as well as the most appropriate marketplace |
| Historical Cost | The cost of the item when it was first placed in service. This is also known as the base price. |
| Hypothetical Condition | a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis. |
| Income Approach | Analyzes comparable data as are available and/or applies a present value formula to calculate the present worth of income anticipated to be generated in the future through sale or lease. |
| Inherent Vice | defined as hidden or latent defects which, when combined with the ambient conditions of humidity, temperature, light and gravity, contribute to the property damaging itself. |
| Intangible Property (intangible Assets) | Are Non-Physical Assets, including but not limited to franchises, trademarks, patents, copyrights, goodwill, equities, mineral rights, securities, and contracts as distinguished from physical assets such as facilities and equipment. |
| Integrated Property | Characterized by being composed of two or more components. |
| Intended Use | The use(s) of an appraiser's reported appraisal or appraisal review assignment results, as identified by the appraiser based on communication with the client at the time of the assignment |
| Intended User | the client and any other party as identified, by name or type, as users of the appraisal or appraisal review report by the appraiser on the basis of communication with the client at the time of the assignment |
| Intrinsic | Pertaining to the essential nature of a thing; inherent ; originating from within; internal to. |
| Investment Property | Property expected to generate income in the form of either a stream of monetary returns or as a one-time future sale at which time a profit is anticipated. _____________ has investment value, market value and owner value. |
| Investment Value | The monetary return anticipated to be realized over a period of time as a result of owning investment property |
| Irreplaceable Property | The property for which a duplicate or suitable equivalent cannot be either purchased or reproduced. |
| Jurisdictional Exception | An Assignment condition established by applicable law or regulation which precludes an appraiser from complying with parts of USPAP or ISA standards |
| Limiting Condition | Limit the appraiser's liability and limit the scope of the appraisers responsibilities in an appraisal assignment. |
| 2 Types of Liquidation Values | Forced Liquidation Value Orderly Liquidation Value |
| Loss on Value | the degree to which an item has lost worth because of damage and subsequent professional repair/restoration. |
| Market Value | the most probable amount of money that a buyer will have to pay, and that the seller is most likely to receive, for an item of property within the defined marketplace at a particular point in time. |
| Marketable cash Value or Net Proceeds | the net proceeds of a sale. Expenses might include advertising auctioneer or brokers commission, transportation costs, photography costs, trash removal, etc. |
| Marketable non-investment property | That saleable property which is held without the expectation of earning income. Has market and owner value. |
| Mass appraisal | the process of valuing a universe of properties as of a given date using standard methodology, employing common data, and allowing for statistical testing |
| Mean | A Statistical Term of Central value tendency, which refers to the statistical average of the observations |
| Median | a Statistical term of central value tendency which refers to the middle value where an odd number of values are arranged according to size. Where there is an even number of observations, the_______ is the mean or average of the two central values. |
| Misleading | intentionally or unintentionally misrepresenting misstating or concealing relevant facts or conclusions. |
| Mode | A Statistical term of central value tendency, which refers to the observation that occurs most frequently within a given sampling. |
| Net Proceeds or Marketable Cash Value | The gross proceeds from a sale less costs associated with the sale such as auctioneers commission, hauling, advertising, taxes, etc. |
| Net Value | Term commonly used in equitable distribution proceedings (divorce, business dissolution, estate division) to indicate the market value of property less any encumbrances or expected selling commissions or costs. |
| Non- investment property | property owned without the anticipation of income. |
| Objective | the type of value or cost the appraiser is seeking based upon the intended use of the appraisal |
| Obsolescence | Refers to a loss in value due to a decrease in the usefulness of the item. ________ can be described as functional or technological which are internal to the item. Economic ________ recognizes external forces that reduce the value of an item |
| Orderly Liquidation Market | The market in which property is regularly sold in an orderly and advertised fashion but for which time constraints apply. |
| Orderly Liquidation Value | The most probable price for which an item would change hands between knowledgeable buyers and sellers if sold in an orderly manner, properly advertised and allowing a reasonable amount of time to complete the transaction in an appropriate marketplace. |
| original cost | the cost of acquisition to the current owner |
| ouvre | the total body of an artists work, which would include all works produced by the artist. |
| Owner Value | Recognizes the non-monetary satisfactions the owner enjoys as a result of owning the property. ______ may be more than market value if the owner perceives it as such. e.g. "sentimental value" |
| ownership rights | are defined as the rights to own, use, consume, transfer title, sell, etc property. |
| parallel market | used when there as no specific comparables for an item. An appraiser looks at another category, artist, or market and makes relevant correlations between the two categories or marketplaces. |
| Personal Property | Any intangible or intangible article that is subject to ownership and not classified as real property, including identifiable tangible objects. |
| physical characteristics | are attributes of a property that are observable or measurable as a matter of fact, as distinguished from opinions and conclusions, which are the result of some level of analysis or judgement. |
| pre-existing damage | insurance casualty loss or a transit related claim appraisal term. it is damage, wear and tear, earlier repairs, or other change from "line-new" condition, which existed prior to a household goods move or prior to the date of a casualty loss. |
| Present Worth | an accounting term which represents the current amount, that would be the equivalent of income generated by the sale of property at some point in the future or the stream of income generated by leasing property for a specified amount of time. |
| Price | the amount asked, offered, or paid for a property. _____ may be artificially high. |
| Production Cost | The total cost of constructing an equally good substitute (i.e. an equivalent item) |
| Prospective Appraisal | one which the effective date of the appraisal occurs after the date of the report |
| Provenance | os the origin and the history of the property, such as its past ownership, exhibitions showing the item, literature mentioning particular property, etc. |
| Public | is defined as the ultimate consumer or the most customary consumer (not limited to individuals) of the property in its current form |
| Qualifying Organization | recognized by the IRS as exempt from federal income tax; usually a charitable, religious, educational, scientific, literary, testing for public safety, fostering national or international amateur sports competition, or animal charity |
| Real Estate | an identified parcel or tract of land, including improvements, if any. |
| Real Property | the interests, benefits, and rights inherent in the ownership of real estate |
| relevant characteristics | are features that may affect a property's value or marketability such as legal, economic, or physical characteristics. |
| replaceable property | that property that can be replaced by purchase, production, or reproduction of another property that is 1) either identical, or 2) that is considered a suitable equivalent. |
| replacement cost | an insurance term meaning the cost to replace an item with another having similar qualities within a reasonable amount of time in the relevant marketplace. This is done though production, reproduction, or purchase |
| Replacement Cost Comparable | cost necessary to replace an item of PP w/ an equivalent or similar item within a reasonable amount of time in the relevant marketplace. generally used within antiques or items where age/provenance is a significant value characteristic. |
| Replacement Cost New | cost necessary to replace an item of PP w/ an equivalent or similar item within a reasonable amount of time in the relevant marketplace. It considers that items may be upgraded to the latest model or style. |
| Replacement Value | cost to replace an item of PP w/ an equivalent or similar item within a reasonable amount of time in the marketplace where the client shops. includes the costs of aquiring/ replicating the property, + the costs with replacement - taxes, framing, etc |
| Report | any communication, written or oral, of an appraisal or appraisal review that is transmitted to the client or a party authorized by the client upon completion of an assignment. most ______ are written and most clients mandate written reports. |
| Restricted Appraisal Report | Option that provides appraisers with a means of communicating their results in a format with less detail and explanation. includes clear and conspicuous warning statement that the report may not contain supporting rationale in report. |
| Appraisal Report | option that provides more extensive explanation and background. It must at least summarize the appraiser's analyses and the rationale for the conclusions. The amount and level of detail required depends on the intended use and scope of work. |
| Reproduction Cost | The total cost of having a qualified artist or craftsman construct an exact duplicate (i.e. an exact item) using the same materials and construction techniques as the original. |
| Retail Market | the market in which items are sold at retail, i.e. to the end consumer. Examples are antique shops, art galleries, jewelry stores, and department stores. |
| Retail Price | the price the ultimate consumer is asked to pay for an item in the retail market |
| Retrospective Appraisal | Provide a Value conclusion as of an effective date, which is prior to the date of the report. A ________ mentally goes back in time to the effective date and applies data as of that earlier date and not after. |
| Review | the act or process of critically studying a report prepared by another |
| Sales comparison approach | Analyzes Comparable Sales Data as are available to indicate q value conclusion within the market considered most common for the property. |
| Salvage Value | The amount that can probably be obtained from a damage item or for the components of a damaged item |
| Scope of Work | the type and extend of research and analyses in an appraisal or appraisal review. May include: -Property Identification - Property Inspection - the type and extent of data researched, and - analysis applied to arrive at opinions or conclusions |
| Scrap Value | A Kind of Salvage Value and is the amount that would probably be obtained for a property that was being broken up to obtain materials. It recognizes the intrinsic value of the materials comprising the original item. |
| Seperation Effect | States that the sum of the values for the individual items from the collection exceeds the value of the collection as a whole. |
| Signature | personalized evidence indicating authentication of the work performed by the appraiser and the acceptance of responsibility for content, analyses and the conclusion of the report. |
| Snob Effect | States that the price or an item is set high so that only a small number of buyers can own the item. |
| Substantial Evidence | is "such evidence as a reasonable mind might accept as adequate to support a conclusion". _________ must be free of bias or personal interests whether financial or emotional |
| Supply | the amount of a commodity available at a given time for meeting a demand or for purchase at a given price. |
| Tangible Property | property that can be touched or observed and is normally utilitarian, decorative, or collectible in nature. |
| Technological Obsolescence | the passing out of usefulness due to the ability to duplicate the same results by creating a new replacement using new technology and modern manufacturing materials and techniques. |
| Terms and Conditions | include issues pertaining to how each appraisal assignment was conducted. They should be designed to cover all possible areas of the assignment where liabilities, errors, or omissions might be charged or imputed. |
| transmittal letter | an optional document used to convey the appraisal report to the client. the transmittal letter is NOT. part of the appraisal, is often separate from the appraisal document, and is frequently discarded by to client. |
| valuation | the process of determining monetary worth based upon the past exchange of such items in the marketplace. |
| valuation services | services pertaining to aspects of property value, regardless of the type of service and whether it is performed by appraisers or by others |
| value | is the monetary relationship between properties and those who buy, sell, or use those properties, expressed as an opinion of worth of a property at a given time. |
| Value in Exchange | is the amount of money the property would bring if sold. A used car would sell for less than a new car. |
| value in place | is the value of property taking into consideration the extent to which the property contributes to the success of an enterprise. Value in place recognizes a premium in value over the propertys value if it were not in place and making the contribution. |
| Value in Use | the value of property taking into consideration the extent to which the property contributes to the personal needs, satisfactions, or requirements of the owner. |
| Veblen Effect | named after Thorstein Bundle ______, a sociologist and economist who noted that if a purchaser perceives that an item is of a better quality they will pay more for it, even without evidence. |
| Wholesale Market | the market in which ______ can sell to the trade and dealers can buy for resale to the public. |
| workfile | the data, information, and documentation necessary to support the appraiser's opinions and conclusions to show compliance with USPAP. |
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