Real Esate Appraisal (Value)
Terms
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- WHAT IS MARKET VALUE ?
- MARKET VALUE IS THE EXPECTED PRICE IN AN ARM'S LENGTH TRANSACTION.
- TRANSACTIONS THAT ARE NOT ARM'S LENGTH IS CONSIDERED?
- DISTORTED.
- WHAT IS INEVESTMENT VALUE ?
- INVESTMENT VALUE IS THE SPECIFIC VALUE OF AN INVESTMENT BASED ON THE SPECIFIC NEEDS OF A PARTICULAR INVESTOR.
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WHAT IS USE VALUE ?
(VALUE IN USE ) -
VALUE IN USE IS THE OWNER-USER BASED VALUE OF A SPECIAL PURPOSE PROPERTY SUCH AS A HOSPITAL.
(COST APPROACH IS THE EFFECTIVE METHOD) - WHAT IS ASSESSED VALUE ?
- ASSESSED VALUE IS THE VALUE ESTABLISHED FOR AD VALOREM TAX PURPOSES.
- WHAT IS INSURABLE VALUE ?
- INSURABLE VALUE IS THE PORTION OF ASSET VALUE RECOGNIZED UNDER THE PROVISIONS OF A LOSS INSURANCE POLICY.
- WHAT IS GOING CONCERN VALUE ?
- GOING CONCERN VALUE IS THE VALUE OF A BUSINESS CONSIDERED SEPERATE FROM THE REAL ESTATE.
- WHAT IS LIQUIDATION VALUE ?
- LIQUIDATION VALUE IS THE VALUE BASED ON A QUICK SALE OR LESS THAN ADEQUATE EXPOSURE ON THE OPEN MARKET.
- WHAT ARE THE 12 ECONOMIC PRINCIPLES ?
- ABSORPTION, ANTICIPATION, BALANCE, CONFORMITY, COMPETITION, CONSISTENT USE,CONTRIBUTION, OPPORTUNITY COST, SUPPY AND DEMAND, SURPLUS PRODUCTIVITY, AND UTILITY.
- WHAT IS ABSORPTION ?
- ABSORPTION IS THE RATE AT WHICH A PARTICULAR TYPE OF PROPERTY WILL BE SOLD OR LEASED EACH YEAR.
- WHAT IS ANTICIPATION ?
- VALUE TODAY IS CREATED BY THE ANTICIPATION OF BENEFITS TO BE DERIVED IN THE FUTURE.
- WHAT IS BALANCE ?
- BALANCE FEATURES A REASONABLE DEGREE OF SIMILARITY IN ARCHITECTURE, VALUE, INFLUENCE OF POLLUTION AND SERVICES AVAILABLE.
- WHAT IS CONFORMITY ?
- CONFORMITY EXISTS WHEN A PROPERTY IS NEITHER OVER-IMPROVED NOR UNDER-IMPROVED IN RELATIONSHIP TO ITS SURROUNDING.
- WHAT IS PRINCIPLE OF REGRESSION ? (CONFORMITY)
- PRINCIPLE OF REGRESSION STATES THAT THE VALUE OF AN OVER-IMPROVED PROPERTY DECLINES TOWARDS ITS SURROUNDINGS.
- WHAT IS THE PRINCIPLE OF PROGRESSION ? (CONFORMITY)
- PRINCIPLE OF PROGRESSION STATES THAT THE VALUE OF AN UNDER-IMPROVED PROPERTY INCREASES TOWARDS ITS SURROUNDINGS.
- WHAT IS COMPETITION ?
- COMPETITION IS THE ACTIVE DEMAND BY TWO OR MORE MARKET PARTICIPANTS FOR AN ITEM IN SHORT SUPPLY. INCREASED COMPETITION TENDS TO REDUCE EXCESS PROFITS.
- WHAT IS CONSISTENT USE ?
- CONSISTENT USE MEANS THAT IMPROVED LAND MUST BE VALUED FOR THE SAME USE AS ITS EXISTING IMPROVEMENTS.
- WHAT IS CONTRIBUTION ?
- THE VALUE OF A PARTICULAR COMPONENT IS MEASURED IN TERMS OF ITS CONTRIBUTION TO THE VALUE OF THE WHOLE PROPERTY. CONTRIBUTION IS ALSO REFERRED TO AS INCREASING OR DECREASING RETURNS.
- WHAT IS OPPURTUNITY COST ?
- OPPURTUNITY COST IS THE COST OF PASSING UP AN OPPORTUNITY OR THE COST OF OPTIONS FORGONE.
- WHAT IS SUBSTITUTION ?
- IF SEVERAL SIMILAR PROPERTIES ARE AVAILABLE, THE LOWEST PRICED WILL ATTRACT THE GREATEST DEMAND.
- WHAT IS SUPPLY AND DEMAND ?
- PRICES VARY DIRECTLY WITH DEMAND AND INVERSLY WITH SUPPLY.
- WHAT IS SURPLUS PRODUCTIVITY ?
- SURPLUS PRODUCITIVTY IS THE NET INCOME THAT REMAINS AFTER THE COST OF LABOR, CAPITAL, AND COORDINATION HAVE BEEN PAID.
- WHAT IS UTILITY ?
- UTILITY IS A MEASURE OF USEFULNESS OF A PROPERTY.
- WHAT ARE THE 4 MAJOR FACTORS THAT INFLUENCE VALUE ?
- SOCIAL FORCES, ECONOMIC FORCES OR CONDITIONS, GOVERNMENT FORCES OR CONTROLS, AND ENVIROMENTAL OR GEOGRAPHIC CONDITIONS.
- WHAT ARE SOCIAL FORCES ?
- SOCIAL FORCES ARE THE DEMOGRAPHICS. POPULATION, RATE OF FAMILY FORMATIONS/DISSOLUTIONS.
- WHAT ARE ECONOMIC FORCES ?
- ECONOMIC FORCES ARE FACTORS THAT AFFECT PURCHASING POWER. WAGE LEVELS, ECONOMIC BASE, AVAILABILITY OF CREDIT.
- WHAT ARE GOVERNMENT FORCES ?
- GOVERNMENT FORCES INVOLVE POLITICAL INFLUENCE ON THE MARKET. TAXES, PUBLIC SERVICES,LAWS.
- WHAT ARE ENVIROMENTAL CONDITIONS ?
- ENVIROMENTAL CONDITIONS ARE GEOGRAPHIC OF PHYSICAL FACTORS THAT AFFECT THE DESIRABILITY OF A PROPERTY OR COMMUNITY. WEATHER, VIEW, LOCATION, TOPOGRAPHY.
- WHAT IS MONEY MARKET ?
- MONEY MARKET ARE INVESTMENTS IN SHORT-TERM FINIANCIAL INSTRUMENTS. TREASURY BILLS/NOTES, CERTIFICATES OF DEPOSIT, GOVERNMENT SECURITIES.
- WHAT IS CAPITAL MARKET ?
- CAPITAL MARKET ARE INVESTMENTS IN SHORT-TERM FINANCIAL INSTRUMENTS. LAND CONTRACTS, STOCKS AND BONDS, MORTGAGES.