Real estate appraisal
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| Accrued depreciation | Loss in value resulting from the property's physical deterioration, external depreciation (decrease in price), and functional obsolescence
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| Anticipation | the appraisal principle that holds that value can increase or decrease based on the expectation of some future benefit or detriment produced by the property
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| Appraisal | an estimate of the quantity, quality, or value of something. The process through which conclusions of property value are obtained; also refers to the report that sets forth the process of estimation and conclusion of value
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| Assemblage | The combining of two or more adjoining lots into one larger tract to increase their total value ((action))
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| Broker's price opinion | Compares actual results with the original budget, often giving either percentages or a numerical variance of actual vs projected income and expenses
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| Capitalization rate | the rate or return a property will produce on the owner's investment
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| change | the appraisal principle that holds that no physical or economic condition remains constant
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| competitive market analysis (CMA) | a comparison of the prices of recently sold homes that are similar to a listing seller's home in terms of location, style, and amenities
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| competition | the appraisal principle that states that excess profits generate competition
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| conformity | the appraisal principle that holds that the greater the similarity among properties in an area, the better they will hold their value
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| contribution | the appraisal principle that states that the value of any component of a property is what gives to the value of the whole or what its absence detracts from that value
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| cost approach | the process of estimating the value of a property by adding to the estimated land value the appraiser's estimate of the reproduction or replacement cost of the building, less depreciation
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| depreciation | in appraisal, a loss of value in property due to any cause, including physical deterioration, functional obsolescence, and external obsolescence
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| economic life | the number of years during which an improvement will add value to the land
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| external obsolescence | incurable depreciation caused by factors not on the subject property, such as environmental, social, or economic factors
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| functional obsolescence | A loss of value to an improvement to real estate arising from functional problems, often caused by age or poor design
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| gross income multiplier (GIM) | a figure used as a multiplier of the gross annual income of a property to produce an estimate of the property's value
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| gross rent multiplier (GRM) | the figure used as a multiplier of the gross monthly income of a property to produce an estimate of the property's value
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| highest and best use | the possible use of a property that would produce the greatest net income and, thereby, develop the highest value
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| income approach | the process of estimating the value of an income-producing property through capitalization of the annual net income expected to be produced by the property during its remaining natural life
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| law of diminishing returns | law that applies when at the point where additional improvements do not increase income or value
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| law of increasing returns | law that applies as long as money being spent on improvements produces an increase in income or value
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| market data approach | AKA sales comparison approach. Estimate of the value obtained by comparing property being appraised with recently sold comparable properties
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| market value | the most probable price property would bring in an arm's length transaction under normal conditions on the open market
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| net operating income (NOI) | the income projected for an income-producing property after deducting losses for vacancy and collection and operating expenses
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| physical deterioration | a reduction in a property's value resulting from a decline in physical condition; can be caused by action of the elements or by ordinary wear and tear
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| plottage | the increase in value or utility resulting from the consolidation of two or more adjacent lots into one larger lot ((abstract result))
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| progression | an appraisal principle that states that, between dissimilar properties, the value of the lesser-quality property is favorably affected by the presence of the better-quality property
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| reconciliation | the final step in the appraisal process, in which the appraiser combines the estimates of value received from the sales comparison, cost, and income approaches to arrive at a final estimate of market value for the subject property
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| regression | an appraisal principlethat states that, between dissimilar properties, the value of the better-quality property is affected adversely by the presencee of the lesser-quality property
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| replacement cost new | the construction cost at current prices of a property that is not necessarily an exact duplicate of the subject property but serves the same purpose or function as the original
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| reproduction cost | the construction cost at current prices of an exact duplicate of the subject property
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| sales comparison approach | the process of estimating the value of a property by examining and comparing actual sales of comparable properties
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| sales price | the amount of money paid to a seller for a product bought
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| supply and demand | the appraisal principle that follows the interrelationship of supply and demand for real estate. Recognizes that real property is subject to the influence of the marketplace as with any other commodity
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| uniform standards of professional appraisal practice (USPAP) | a set of standards that details information required of an appraisal of residential property. Required by many government agencies.
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| value | the power of a good or service to command other goods in exchange for the present worth of future rights to its income or amenities
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Created by:
ncoffill
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