Appraisal terms
Terms
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- APPRAISAL
- opinion of value of real property - not a determination of value
- VALUE
- refers to present worth of all rights to current and future benefits of ownership
- types of ESTIMATES of VALUE
-
market value
assessed value
insurance value
investment value - Name the COMMON REQUIREMENTS for a REAL PROPERTY APPRAISAL
- 1. opinion of value must be defined 2. property must be adequately and accurately described 3. opinion of value must be supported w/general & specific data 4. must have specific date 5.appraiser must be unbiased & no undisclosed interest in the prop 6. appraiser must have adequate experience/education to complete the appraisal
- The general & basic PURPOSE of a real property appraisal is________
- to arrive at an opinion of value of a property
- REASONS for APPRAISALS
- 1. transfer of ownership of a property 2.financing & credit decisions 3.just compensation in condemnation (eminent domain) proceedings 4.tax assessments 5.establishing rental schedules & lease provisions 6. issuance of insurance policies
- 3 APPROACHES to VALUE used to appraise real property
-
1. sales comparison approach
2. cost approach
3. income approach - 1. Sales Comparison Approach to appraise real property
-
same as MARKET DATA APPROACH
involves making a direct comparison between the appraised property & other similar props.that have sold recently, or have been listed - COMPARABLES or "COMPS"
- The properties used for comparison in the MARKET DATA APPROACH/SALES COMPARISON APPROACH
-
2. Cost Approach
to appraise real property -
Estimates a value for the property based on the current cost to reproduce or replace the improvements
EX. - school bldgs., fire stations, courthouses, highway bridges -
3. Income Approach
to appraise real property -
used most often w/income producing property, such as apt. bldgs., office bldgs., or shopping centers.
Involves estimating the income a prop can be expected to produce & converting that into an estimated value for the prop - PROPERTY
- refers to the rights of OWNERSHIP
- RIGHTS of OWNERSHIP include the rights of ________
-
use, possession, enjoyment, and disposal, AND the right to exclude everyone else from interfering w/those rights.
REFERRED to as the
"BUNDLE of RIGHTS" -
CLASSIFICATION of PROPERTY
Name the 2 groups -
REAL PROPERTY
and PERSONAL PROPERTY