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Appraisal
An estimate (opinion) of value.
Market Value
The most probable price in a competitive and open market under fair conditions.
Comparative Market Analysis (CMA)
Utilizes the sales comparison approach to determine the market value of a property.
Economic Principles of Value
Factors like demand, utility, scarcity, and transferability that influence property value.
Highest and Best Use
The optimal use of a property that results in the highest value.
Substitution
Using similar properties to determine market value.
Contribution
Elements that add value to a property, like a community pool or clubhouse.
Change
The concept that value can fluctuate over time.
Conformity
Ensuring a property fits within the neighborhood to maintain or increase value.
Anticipation of Value
Present worth of future benefits, especially for income-producing properties.
Plottage
Increase in value from combining adjacent lots into a larger one.
Influences on Value
Social, economic, political, and physical factors that affect property value.
Approaches to Value
Sales comparison, income, and cost approaches used to estimate property value.
Depreciation
Types include physical deterioration, functional obsolescence, and external obsolescence.
Comparative Market Analysis (CMA)
Utilized by real estate agents to determine property value through the sales comparison approach.
Broker Price Opinion (BPO)
A cheaper alternative to formal appraisals, often used by banks for property valuation.
The Appraisal Process
Involves defining the problem, collecting data, applying valuation approaches, and reconciling estimates.
