Home
Flashcards
Preview
Valuation & Market Analysis - Chapter 5
Home
Get App
Take Quiz
Create
Help determine a listing price from sold & for sale properties
(CMA) Competitve Market Analysis
More detailed, used by 3rd party to provide a basis for negotiation to determine a list price
(BPO) - Brokers Price Opinion
The present worth of future benefits arising from the ownership of real property
Value
Characteristics for a property to have value in real estate market
(DUST) -
1. Demand - need support by purchasing power
2. Utility - Capacity to satisfy human wants and needs
3. Scarcity - Finite Supply
4. Transferanility - Transfer ownership rights with relative ease
Most profitable use to which a property may be adapted, given legal constraints
Highest & Best Use
Value of property set by cost of purchasing an equally desirable and similar property
Subsitution
Maximum value realized if if land use conforms to existing neighborhood standards
Conformity
Improvements to land & structures produce increase or decrease in value
Increasing and Decreasing Return
Hgh levels of profits attract competitors
Competition
No economic or physical condition remains constant
Change
Value of any component of property consist of what its additions contribute to value of whole property
Contribution
Value Increases or decreases in anticipation of some future benefit or detriment
Anticipation
Combining contigous property, increasing the value
Plottage
Actual combining the properties into one is
Assemblage
Principle between dissimilar properties, worth of better is affected by presence of lesser quality property
Regression
Worth of lessen property increases if among better properties
Progression
Based on Principle of Substitution
Cost Approach
steps of Cost Aproach
1. Estimate the land
2. Estimate the replacement cost of improvements
3. Estimate Depreciation
4. Deduct depreciation from Replacement cost
5. Add land value to depreciated cost of improvements
Wasting assests, such as building
Depreciation
Sales Comparison or Direct Sales ("Arms length")
Market/Data approach
Based on present value of rights to future income
Income Capitalization Approach
Net income ./. Capitalization Rate = value
formula for Capitalization Rate
Sales Price ./. Monthly Rental Income =
GRM
Sales price ./. Annual Rental Income =
GIM
Tangible and Intangible neighboritiehod Benefits
Amenities
Mathemeaticla Process for estimating a properties value using a proper rate of return on investment & anticipated annual net income
Capitalization
Rate of Return a property will produce on the owners investment
Capitalization Rate
Sold properties in appraisal report equivalent to subject property
Comparables
Final Step of Appraisal process, Combining all 3 approches to arrive at final Estimate
Reconciliation
Property being appraised
Subject Property
URAR
Uniform Residential Appraisal Report
Author
nleggett
ID
241672
Card Set
Valuation & Market Analysis - Chapter 5
Description
Chapter 5
Updated
2013-10-20T15:34:53Z
Show Answers
Home
Flashcards
Preview