FL PL, Level 16 - Real Estate Appraisal

assemblage

the combining of multiple contiguous pieces of real property into a single tract of land, often resulting in an increase in value

highest and best use

the use of a property which is legal, physically possible, financially viable, and produces the greatest yield

market value

The price for which a property will theoretically sell under typical conditions

over-improvement

an improvement on a land in excess of the need

plottage

An increase in overall value resulting from the successful assemblage of multiple plots

progression

a bump in a property's value due to its proximity to properties of high value

regression

a drop in a property's value due to its proximity to properties of low value

valuation

the process of collecting information and developing an opinion of value for real property

federally related transaction

a real estate transaction that involves a government agency in its financing

reconciliation

the finding of a fair value using multiple appraised values, whether they be of different approaches or the same

sales comparison approach

Property appraisal method that estimates value by comparing the subject property to the sales prices of similar properties in the same market area

subject property

the property whose value is being determined

cost-depreciation approach

method of estimating the value of a property by determining how much it would cost to replace the building or other improvements, minus the cost of depreciation, plus the value of the land itself

curable

depreciation that can be fixed and that the cost of doing so would be reasonable

depreciation

a reduction in value for any reason

economic life

the length of time for which an improvement on property is expected to remain functional and useful

gross income multiplier (GIM)

the ratio of the price of investment property to its annual rental income and other forms of income before considering expenses like taxes and insurance, etc

incurable

depreciation that cannot be fixed and that the cost of doing so would be unreasonable

principle of substitution

an economic principle stating that the value of a good or service is affected by the cost of getting a similar (substitute) item elsewhere

replacement cost

the actual cost of replacement without regard to depreciation of the property

reproduction cost

the cost of procuring exact copies of the building's components, preserving the styles and materials used at the subject property's original construction

gross rent multiplier (GRM)

the ratio of the price of investment property to its annual rental income before considering expenses like taxes and insurance, etc

income approach

method of estimating the value of a property by applying a rate of return to the net income it produces

automated valuation models

A computerized valuation of a property that takes into account comparables, tax assessors, nationwide market values, and sales history

Uniform Standards of Professional Appraisal Practice (USPAP)

the generally recognized ethical and performance standards for the appraisal profession in the United States