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Real Estate Appraisal:3(Test 1)
3-Foundations of Appraisal
13
Real Estate & Planning
Undergraduate 4
09/30/2009

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Cards

Term
Four agents of production
Definition

  1. Land
  2. Labor
  3. Capital
  4. Entrepreneurial coordination

Term
Land
Definition
cost to acquire 
Term
Labor
Definition
direct/indirect costs required to construct and market 
Term
Capital
Definition
equipment, buildings, infrastructure  
Term
Is value based on historical price?
Definition
Not usually..its is based on the market participants perceptions of future benefits
Term
Principal of Substitution
Definition

when several similar or commensurate commodities, goods, or services are available, the one with the lowest price attracts the greatest demand and widest distribution

a buyer will not pay more for one property than for another that is equally desirable

Term
Principal of Balance
Definition
real property value is created and sustained when contrasting, opposing, or interacting elements are in a state of equilibrium
Term
Principal of Contribution
Definition
the value of a particular component is measured in terms of its contribution to the value of the whole property or as the amount that its absence would detract from the value of the whole
Term
Surplus Productivity
Definition
the net income that remains after the costs of various agents of production have been paid
Term
Conformity
Definition
appraisal practice that holds that real property value is created and sustained when the characteristics of a property conform to the demands of its market
Term
progression
Definition
the value of an inferior property is enhanced by its association with better properties of the same type
Term
regression
Definition
the value of a superior property is adversely affected by its association with an inferior property of the same type
Term
Forces that influence Real Property Markets
Definition

  1. Social Forces
  2. Economic Circumstances
  3. Governmental Controls and Regulations
  4. Environmental Conditions

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