Ch. 11 Appraisal Basics

Appraisal

Is an opinion as to the monetary value of a particular property at a given date

Market value

Is the price of willing viable pay in a willing seller except both being fully informed and with the sale property exposed for a reason period of time

Market price (selling price)

Is the total price including down payment and financing that a property actually brought when sold

Improved value of land

Is the market value of a land in improvements to highest and best use

Value

Is a relationship between the thing desired, and a potential purchaser

General data

Refers to national, regional, and local economic data

Specific data

Refers to economic and physical data about the subject property and comparable properties

Cost approach

Is simply the cost to construct new, minus accrued depreciation, plus the value of the site

Market approach

Utilizes recent confirmed sales of similar properties

Income approach

Is based on the return of income to an investor

Site

Is a particular parcel within a neighborhood

Cul-de-sac

Is a lot facing the turnaround portion of a dead end street

Corner lot

Is a lot that is located at the intersection of two streets

Key lot

Is a lot that is bordered on the side by the back of other lots that front on another street

T intersection lot

Is an interior lot that is faced head on by a street and it is the law at the end of a dead street

Interior lot

Is a lot generally surrounded by other lots on three sides

Flag lot

Is a rear lot in the back of other lots with a long and narrow access driveway

Depth table

Is a percentage table that illustrates how the highest value is located in the front part of a lot in an urban commercial area

Front footage

Is typically the width of the property along the street

Orientation

Is planning the most advantageous place on a parcel of land for an improvement to be located

Amenities

Are those improvements to the land or views that increase the desirability or enjoyment rather than the necessities of the residents

Land area

Is the surface space between lot lines measured in square feet

Rectangular lot

Is a four sided parcel whose opposite sides are equal in length and right angles are formed by the intersection of the sides

triangular lot

Is a three sided parcel

Base of a triangular lot

Is the side that is horizontal

Height of a triangular lot

Is the perpendicular distance from the base to the highest point

Irregular lot

Is a parcel that does not consist of a single known shape

Improvements

Are any buildings, walkways, pools, and other structures

Capital improvements

Are permanent improvements made to increase the useful life of the property or increase the property value and they stay with the property

Offsite improvements

Are the improvements made to areas adjoining the parcel that add to the parcels usefulness and sometimes it’s value

On-site improvements

Are structures erected permanently for use on a site such as buildings and fences

Warranty plan

Is an insurance plan that provides financial protection against defects in any major home construction

Principle of supply and demand

States that as the supply of land decreases, the value of land increases because more people are competing for the desirable land

Principle of change

Is that real property is constantly changing

Principle of conformity

States that the maximum values is obtained when a reasonable degree of building similarity is maintained in the neighborhood

principle of contribution

States that the value of a particular component is measured in terms of its contribution to the value of the whole property

Principle of substitution

A buyer will not pay more for a particular property if it cost less to buy a similar property of equal utility and desirability

Principle of regression

When a house of greater value is adversely affected by houses of comparably lesser value

Principle of progression

The value of a lesser residence is increased in value by its location in a neighborhood of better homes