Term
| The appraisal principle holding that the greater the similarity among properties in an area, the better they will hold their value. |
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| An appraisal principle that the maximum value of a property tends to be set by the cost of purchasing an equally desirable and valuable substitute property, assuming that no costly delay is encountered in making the substitution |
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| An appraisal principle that the value of a better-quality property is affected adversely by the presence of a lesser-quality property. |
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| The appraisal principle stating that the value of any component of a property is what it gives to the value of the whole or what its absence detracts from that value |
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| A loss in value for any reason. A condition that adversely affects the value of an improvement to real property. |
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| The most probable price that a property would bring in an arm’s-length transaction under normal conditions on the open market. |
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| An opinion of value based on supportable evidence and approved methods |
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| data which covers the type and features of improvements to the subject property as well as comparable properties that are similar to and competitive with the subject property. |
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| data, which covers the nation, region, city, and neighborhood. The appraiser researches the physical, economic, social, and political influences that affect the value and potential of the subject property. |
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| an opinion of a property's worth |
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| the asking, offer, or sales price of a property |
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| the period during which it is expected to remain useful for its original intended purpose. |
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| In a real estate appraisal, loss in value due to any cause is called: |
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| class of depreciation, A loss of value to an improvement to real estate arising from problems of design or utility. ex. plumbing |
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| Incurable depreciation caused by factors not on the subject property, such as environmental or economic factors. |
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| type of depreciation, A reduction in a property’s value resulting from a decline in physical condition; can be caused by action of the elements or by ordinary wear and tear. |
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| the foundation of the sales comparison approach. A buyer will not want to pay more for a property than it would cost to purchase an equally desirable and suitable property. |
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Term
| makes use of sales of properties comparable to the property that is the subject of the appraisal by adding or subtracting from the sales price of each comp the value of a feature present or absent in the subject property versus the comparable |
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Definition
| sales comparison approach |
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Term
| Not all estimates of value are made by professional appraisers ____ is different from an appraisal report in that it focuses on properties similar to the subject property in size, location and amenities. |
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Definition
CMA
Comparative Market Analysis |
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| The process of estimating the value of an income-producing property through capitalization of the annual net income expected to be produced by the property during its remaining useful life |
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| If a buyer is interested in purchasing a one- to four-unit residential rental property, the ________ based on monthly rental income could be used for a rough approximation of value. |
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Definition
| gross rent multiplier (GRM) |
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| The income projected for an income-producing property after deducting anticipated vacancy and collection losses and operating expenses. |
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| the act of analyzing and effectively weighing the findings from the three approaches. |
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| What’s above the threshold |
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| The tenant pays rent and the landlord pays property taxes, insurance premiums, repairs and maintenance |
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| The tenant pays the rent plus operating expenses such as taxes, insurance, maintenance and repairs |
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Definition
| The tenant pays a fixed minimum or base rent plus a percentage of profits |
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Definition
| Type of graduated lease in which, an _______ in the agreement protects the landlord against rising costs and inflation |
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| type of graduated lease that provides for rent increases in predetermined amounts and times |
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| Type of graduated lease in which periodic rent adjustments are based on changes in a designated economic index |
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| type of graduated lease where rent increases are tied to operating costs |
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| lease is for the rental of unimproved land |
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| the owner sells the property to an investor with an agreement to lease it back on a long term net lease |
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| Lease that gives the tenant the right to buy at a set price within a designated period of time |
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| The tenant is obligate to purchase at some specific time |
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| The Right of First Refusal |
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Definition
| does not obligate the landlord to sell |
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