Term
|
Definition
| land, improvements attached to the land, and the rights to use them. |
|
|
Term
|
Definition
a right or interest in things of a temporary or movable nature; anything
not classed as real property - Chattel, Personalty. Ownership is transferred by a Bill of Sale. |
|
|
Term
|
Definition
Personal property that has been attached in such a way as to make it real
property. The word “installed” often indicates a permanent attachment. The process of
attaching may also be called annexation. The process of real property becoming personal
will be described by the term “severed”, or severance. Improvements to rental property
by tenants generally become fixtures, or part of the property, and remain at the end of
the lease. |
|
|
Term
|
Definition
required to carry out a business, they may be removed from leased
property prior to the termination of the lease. If trade fixtures are not removed prior
to the termination of the lease, they become real property and pass to the landlord.
Acquiring property in this way is called accession. |
|
|
Term
| Land has three physical characteristics: |
|
Definition
1. nonhomogeneity - no two pieces are exactly alike
2. immobility - land cannot be moved - a person must go to the land
3. indestructibility - durability - it will always be there |
|
|
Term
|
Definition
| no two pieces are exactly alike |
|
|
Term
|
Definition
| land cannot be moved - a person must go to the land |
|
|
Term
|
Definition
| durability - it will always be there |
|
|
Term
| Land has four economic characteristics: |
|
Definition
1. scarcity - in short supply where demand is great – (a lot in Manhattan is more valuable than a
lot in upstate New York.) Scarcity is usually based on geographic considerations.
2. modification - land use and value are greatly influenced by improvements made by man to land
and to surrounding parcels of land.
3. fixity - land and buildings and other improvements to land are considered fixed or permanent
investments – they are not liquid assets.
4. situs - location preference, or location from an economic rather than a geographic standpoint.
(This can change over time as people change.) |
|
|
Term
|
Definition
in short supply where demand is great – (a lot in Manhattan is more valuable than a
lot in upstate New York.) Scarcity is usually based on geographic considerations. |
|
|
Term
|
Definition
land use and value are greatly influenced by improvements made by man to land
and to surrounding parcels of land. |
|
|
Term
|
Definition
land and buildings and other improvements to land are considered fixed or permanent
investments – they are not liquid assets. |
|
|
Term
|
Definition
location preference, or location from an economic rather than a geographic standpoint.
(This can change over time as people change.) |
|
|
Term
|
Definition
terminal points and angles, always has a p.o.b. (point of beginning) This
method uses compass directions, degrees, and minutes. The point of beginning is also the
end, so that the land described is completely defined. This description might include the use
of street names. This is the oldest and most common method of land description and was
used in the thirteen original colonies. |
|
|
Term
| Lot, block, and subdivision |
|
Definition
recorded map - or plat - this is the most common description in
residential listing agreements. |
|
|
Term
|
Definition
permanent surveyors markers – a property is described as being a certain
distance and direction from the marker. Monuments are rarely used alone to describe property.
Monuments are often the starting point for a metes and bounds description, and can
be essential to the accuracy of that description. Monuments can be man-made - an iron pipe,
or natural - a stand of timber, an old oak tree, etc. |
|
|
Term
| Rectangular Survey System |
|
Definition
also know as the Government Survey System, it takes into consideration
base lines, and meridians, townships and sections. Townships and Sections are
located in Ranges. One township contains 36 sections. Each section contains 640 acres,
which is 1 square mile. Each acre contains 43,560 square feet. This system is not used in the
thirteen original colonies |
|
|
Term
| Rectangular Survey System |
|
Definition
| Example: S7 T3 R2 means Section 7 Township 3 Range 2. |
|
|
Term
|
Definition
A street address is not a legal description.
A plat is a map of a town, section or subdivision.
A plot is a map or layout of improvements on a property site. The property site is also called a
lot or parcel. |
|
|
Term
| LEGAL DESCRIPTIONS:Physical Descriptions |
|
Definition
| Physical descriptions of property specify land and building size, and types of construction. |
|
|
Term
| LEGAL DESCRIPTIONS:Physical Descriptions |
|
Definition
Land and building area are measured by square feet, acres, square miles, townships, sections,
ranges, rods, chains and links.
• Construction types include onsite construction and offsite construction consisting of manufactured,
modular and prefabricated buildings. Materials include brick, stone, wood manmade
siding and stucco. |
|
|
Term
|
Definition
An encumbrance is a limitation on your rights. It may also be a cloud on the title. Examples include
liens, reservations, encroachments, leases, easements, deed restrictions, licenses and adverse possession.
The legal method of removing an encumbrance is to release it, or get a release. |
|
|
Term
|
Definition
| a charge against property as security for a debt. |
|
|
Term
|
Definition
is created by the lienee’s
or borrower’s actions, like taking out a mortgage or home improvement loan |
|
|
Term
|
Definition
| Filing or recording the mortgage creates a lien. A mortgage is not effective or enforceable until it is recorded. When the mortgage is recorded, if it is the first recorded claim, it will be the first priority lien. |
|
|
Term
| involuntary lien/statutory lien |
|
Definition
is created by law and can be statutory or equitable. (NOTE: Statutory law always
takes precedence over common law.) |
|
|
Term
| Examples of statutory liens |
|
Definition
Examples of statutory liens include federal tax liens, ad valorem
(according to value) tax liens, judgment liens, and mechanics and materialmens’ (m&m) liens. (Note:
An m&m lien can be placed on a property when materials have been delivered or work has begun.)
Equitable liens come from common law and include seller (vendor) or buyer (vendee) liens. |
|
|
Term
|
Definition
If a party wins a judgment and is unable to collect, he can secure a ----------- from the courts
to enforce payment. |
|
|
Term
|
Definition
withholds title to a part of the land described in the deed. (Example: an easement
or mineral rights) It is imposed by the Grantor. |
|
|
Term
|
Definition
When a structure or improvement overlaps onto another’s property it is an -----------.
----------- must be disclosed. The determination of an -------- requires a survey.
Note: A listing agent discloses a(n)-----------, a buyer’s agent recommends a survey. |
|
|
Term
|
Definition
allows limited use or enjoyment of another’s land. It is a right in land and should
be created in writing and recorded. |
|
|
Term
| How can easements be created? |
|
Definition
created by express (written or verbal) or implied (by actions or evidence) grant,
agreement, reservation, limitation or prescription, necessity, or condemnation. The government will
take these by condemnation for itself, the utilities or the railroads. These can be terminated
by merger (acquiring the adjacent property), release, or abandonment. |
|
|
Term
| Dominant and Servient Estates |
|
Definition
If you have two parcels of land with a road across one parcel, the
owner who crosses over the other’s land is dominant. The dominant estate would be landlocked
without the easement, in most cases. The property with the road is servient to the dominant estate.
The dominant estate benefits from the easement, while the servient estate is encumbered. The most
common reason for this type of easement is entry and exit from the property. This easement is called
an Easement Appurtenant. It goes with the land, and whoever owns the land owns the easement. |
|
|
Term
|
Definition
An ------- belongs to a person or corporation - such as a utility easement. No matter who
owns the land, the easement still belongs to the utility company. It does not go with the land. |
|
|
Term
|
Definition
is permission to do a particular act upon the land or property of another. A theater
ticket or sports event ticket is this. It grants use of one seat for one performance. This
is similar to an easement but of much more limited duration. It is not a right in land. It is often
given verbally and easily revoked. |
|
|
Term
| Adverse Possession (squatter’s rights) |
|
Definition
occurs when property is acquired from the rightful owner
through the Statute Of Limitations. Occupancy must be hostile, visible, actual, continuous, and
distinct for the statutory period. This differs from state to state, and can be a minimum of 3 years
and a maximum of 25 years depending on circumstances and state. It is 10 years in Texas. |
|
|
Term
|
Definition
|
|
Term
|
Definition
| is an interest in real property. |
|
|
Term
|
Definition
is ownership. All the legal rights that attach to the ownership of real property
including but not limited to the right to sell, lease, encumber, use, enjoy, exclude,will to heirs,
etc. are called the Bundle of Rights. Ownership with the greatest bundle of rights - the best
type of ownership - is called Fee Simple or Fee Simple Absolute - the owner has all the available
rights to the property and can always pass it to his heirs.is of indeterminate length (it has no termination date), as opposed to a
non-freehold estate (lease-hold) which has a termination date. |
|
|
Term
| Defeasible Fee or Conditional Fee |
|
Definition
ownership with conditions or terms which if violated
could cause the ownership interest to be defeated or terminated. This is also called qualified
fee or even qualified ------- fee. |
|
|
Term
|
Definition
If this is set up so that at the end of the life estate the property goes back to the original
owner, this is called a ------- with reversion. |
|
|
Term
|
Definition
estate in severalty or sole ownership. tenancy in common(joint ownership)
joint tenancy...trust.syndicate.Tenancy by the Entirety.... |
|
|
Term
| Characteristics of general partnerships |
|
Definition
In a general partnership, all partners share responsibility and liability. In a limited partnership,
limited partners have limited liability and usually are not involved in the day-to-day
operation of the partnership. |
|
|
Term
|
Definition
| Ownership by two or more without rights of survivorship |
|
|
Term
|
Definition
| Ownership by two or more with rights of survivorship |
|
|
Term
To prevent any accidental cases of joint tenancy, there are four unities
required for this type of ownership |
|
Definition
| time, title, interest and possession |
|
|
Term
|
Definition
procedure to divide the cotenant’s interests in real property...It can be a court or voluntary
action. It would divide the property into pieces and end the joint tenancy. |
|
|
Term
|
Definition
| If a property is held by one party for the benefit of another then the property is held in |
|
|
Term
|
Definition
When two or more parties join together to create and operate a real estate investment we
call this a(n) |
|
|
Term
|
Definition
a specific type of joint tenancy where the co-owners are husband
and wife. One advantage of this type of ownership is that it avoids probate. (This is also true
of joint tenancy.) |
|
|
Term
There are four leasehold estates and each gives possession
without ownership. |
|
Definition
| estate for years, periodic tenancy, estate at will, tenancy at sufferance |
|
|
Term
|
Definition
a lease with a specific starting and ending date. This lease survives
death and/or the sale of the property. No notice is required to terminate. |
|
|
Term
|
Definition
a lease with a fixed period that is automatically renewed unless the
tenant or landlord acts to terminate it. A month - to - month lease is this type. Notice to
terminate is usually required. Typically 30 days notice is required to terminate. |
|
|
Term
| estate at will or tenancy at will |
|
Definition
a lease that can be terminated by either party at will
without notice. |
|
|
Term
|
Definition
occurs when a lease expires and the tenant refuses to move out. The
landlord is not receiving rent. This holdover tenant has no right to be there. If the holdover
tenant pays rent and the landlord accepts that rent, a holdover tenancy is created. |
|
|
Term
|
Definition
| is an estate created by law. |
|
|
Term
| Examples of statutory estate. |
|
Definition
| is one created by law. Homestead. |
|
|
Term
| four types of GOVERNMENT RESTRICTIONS - GOVERNMENTAL RIGHTS IN LAND (PETE) |
|
Definition
| Police Power, Eminent Domain, Taxation, Escheat |
|
|
Term
|
Definition
Power given to a municipality to regulate and control the character and use of property
for the health, safety and general welfare of the public.
These provides the government with the right to establish building codes. Specific construction
requirements are set by building codes. (plumbing, electrical, etc.) |
|
|
Term
| Examples of police power. |
|
Definition
Zoning is the most common example of police power. Zoning regulations are local laws to
control land use. Zoning can include master planning. A master plan is a comprehensive
guideline for the long-term physical development of a particular area. Mixed land use is
designed to meet the needs of future residents. Master planning is a process and zoning can
be used to implement the plan.
A change in zoning may result in a non-conforming use. This use was permissible under
former rules, but new rules prohibit it. A non-conforming use is allowed to continue
as it is considered grandfathered. The non-conforming use is automatic, no hearing or
application process is required. A non-conforming use cannot be altered or expanded
without permission, but it can be sold to a party who wishes to continue the existing use. If
the property is destroyed, the non-conforming use may not be rebuilt without permission.
Example of non-conforming use – 6-unit apartment building in a neighborhood zoned
R-1(residential-1 family). (Note – there is no violation of zoning here.)
If your property violates zoning you may request a variance. A variance may also be requested
prior to construction. Adding on to the front of a building would usually require a variance.
The process to obtain a variance is to apply to the zoning committee. A hearing will be
scheduled and all neighborhood property owners will be invited to the hearing to voice any
objections they might have to the variance.
A buffer zone is an area of land separating one land use from another, such as residential
from commercial. The buffer zone is located between incompatible uses. The buffer zone is
a transitional use. Example: single family, apartments, retail. The apartments are the buffer
zone. |
|
|
Term
|
Definition
The right of the government to take private property for public use through the
action of condemnation. This is the only time the government must compensate property owners.
(No compensation for down-zoning). |
|
|
Term
|
Definition
| When an individual forces the government to buy his property |
|
|
Term
| Taxation as a governmental restriction on a property |
|
Definition
Property taxes are the highest priority lien on real property. Property taxes are “ad valorem”
taxes, or according to value. Unpaid taxes create an automatic lien on property. At foreclosure,
property taxes are always paid first.
Tax rates are often expressed as dollars per hundred dollar of valuation. In that case a tax rate
of $2.50 means the property owner will pay $2.50 of tax for every $100 of taxable value. In
some cases a mill rate is used. This is a tax rate per thousand. Therefore, a rate of 25 mills
means the property owner will pay $25 dollars of tax for every $1000 of taxable value.
Some states have a property sales tax usually paid by the seller of real property at closing. It
can be called a transfer tax or a deed tax. It can be expressed as mills or as a rate per hundred.
If the local government is providing a benefit to a limited number of property owners – such
as curbs or sidewalks in a neighborhood, a special assessment tax may be levied against
only those property owners who benefit from the improvement. In a real estate sale with an
unpaid balance on a special assessment, the special assessment is usually paid by the seller,
but could be prorated at closing.
If property is located in a municipal improvement district, the property owner will receive a
tax bill, similar to a special assessment, until the improvement is paid for, or the improvement
district designation is removed. In other words, this can be temporary or permanent.
Local governments use property taxes to cover their expenses because real property is an
asset that cannot be hidden. |
|
|
Term
|
Definition
is the value of your property for tax purposes. The tax rate times the assessed
value will tell you the yearly taxes. Lists of assessed values for all the properties in a taxing
district are found in the assessment rolls. These can be used for comparison purposes. |
|
|
Term
|
Definition
Property reverts to the state when someone dies leaving no will and no heirs or
no kindred. Escheat can also be used if property is abandoned. The purpose of escheat is to
ensure that no land remains unowned. |
|
|
Term
|
Definition
refer to the right to use water from a river or stream that borders property.The water may be used for domestic
purposes, and may not be contaminated.
rights are transferred by deed, or conveyance.
The state might refuse to grant riparian rights to a landowner if there is a scarcity of water. |
|
|
Term
|
Definition
refer to the same right for large navigable lakes or oceans. The water may be used for domestic
purposes, and may not be contaminated.
rights are transferred by deed, or conveyance. |
|
|
Term
|
Definition
For non-navigable water, landowners may own to the middle of the body of water. For navigable
water, landowners own to the vegetation line. Building piers will not extend your property line. The
state owns all navigable water. Generally, all water in rivers, creeks or streams belongs to the state |
|
|
Term
|
Definition
a theory of water law based on the idea that “first in time is first in right.”
The first landowner to claim riparian rights has the exclusive right to take all the water for specific
beneficial uses. Subsequent owners of nearby properties cannot claim water rights. |
|
|
Term
| Terms referring to water rights |
|
Definition
| riparian, littoral and appropriative |
|
|
Term
| Types of PRIVATE CONTROL OF LAND |
|
Definition
C,C&R’s -deed covenants, conditions and restrictions.
C,C&R’s are commonly referred to as Deed Restrictions, or Deed Covenants. HOA (Home
Owner Association) regulations are like deed restrictions but usually apply to condominium complexes. |
|
|
Term
HOA (Home
Owner Association) regulations |
|
Definition
| like deed restrictions but usually apply to condominium complexes. |
|
|
Term
|
Definition
imposed to control land use, development and methods and materials for
construction. Style and appearance requirements can also be enforced.(garages facing the rear of the
property etc.) They are found in a recorded document called a Declaration of Restrictions. They are
imposed by the Grantor. Violation can result in civil court action brought by other property owners
who are bound by the same deed restrictions. The court will issue an injunction to enforce the restrictions.
In some cases, deed restrictions and zoning can both exist. If this is true, whichever is most
restrictive or limiting must be obeyed. Deed restrictions are permanent in most cases and do not
expire. They control present and future owners and tenants. |
|
|
Term
| Declaration of Restrictions. |
|
Definition
| Where you can find deed restrictions |
|
|
Term
|
Definition
| enforces deed restrictions. |
|
|
Term
|
Definition
is considered to be the price a willing seller will sell for, and the price a willing buyer
will pay, when neither is acting under exceptional pressure.defined as the most
probable price. |
|
|
Term
|
Definition
| an estimate of the future benefits to be derived from the property. |
|
|
Term
|
Definition
| generally what one must pay for a property |
|
|
Term
|
Definition
| an estimate of past expenditures. |
|
|
Term
| There are four basic characteristics of value: |
|
Definition
(DUST)
Demand – there must be a demand for the item and purchasing power to acquire it
ŠŠ Utility – the item must be needed or wanted
ŠŠ Scarcity – there must be a limited supply
ŠŠ Transferability – the item must be able to be sold – ownership rights must be transferable |
|
|
Term
| CMA – Comparative Market Analysis |
|
Definition
a tool used by licensees to help sellers determine a realistic
price for their property – this compares a subject property to current listings, recent sales, and even
expired listings of unsold properties. The information from expired listings is the least important part
of it. The result of this is a range of value for a property rather than an exact price. It is
not an appraisal. |
|
|
Term
A BOV or a Broker’s Opinion of Value
also called the Brokers Price Opinion (BPO) |
|
Definition
similar to a
CMA but used by a relocation firm, or commissioned by a bank or an attorney handling a divorce
or estate problem. The broker is usually paid for the BOV as opposed to the CMA, which is usually
offered for free. |
|
|
Term
| There are three basic approaches to appraisal: |
|
Definition
market data or sales comparison, income or
capitalization method, and replacement or reproduction cost approach. |
|
|
Term
| market data approach to appraisal |
|
Definition
used primarily in residential appraisals. It involves comparisons
with known sales in the same area. An appraiser should have 3-5 sales no more than six
months old. In using this approach, the appraiser will add to the value of comparables when
the subject property has more amenities, and deduct from the comparables when the subject
property has less In choosing comparables, the best choice will be the one with the least
number of adjustments, regardless of cost.
Example: An appraiser has been asked to determine the market value of a residential property.
The house is two years old and has a $1500 porch. The only available comparable is brand
new and does not have a porch. It has been determined that being new adds $2000.00 to the
value. The comparable is valued at $169,500. |
|
|
Term
| income approach to appraisal |
|
Definition
The income approach is used for income producing properties. The conversion of an income
stream into an indication of value is known as capitalization.
Chapter 3
Valuation
and Market
Analysis
15
Copyright© 2013 Champions School of Real Estate™
net annual income
cap rate/rate of return | market value
Generally, if a property has rent, then use the income approach. The capitalization rate, or
rate of return, and market value have an inverse relationship. An increase in one results in
a decrease in the other. So, when rates of return are high, a small investment gives a good
return, but when rates are low, a larger investment is needed to get a good return.
There are two simple backup procedures (they give the appraiser a starting point, rather
than a result) to the income approach:
a. The first is used for residential properties and is called the Gross Rent Multiplier, or
GRM. The GRM is a factor based on location and rent – a price per rent.
This number, when multiplied by the monthly rent gives an estimate of value for the
property. (GRM x rent = price)
For example, if the GRM is 150 and monthly rent on a single-family house is
$1,000.00 then the value of the house is 150 x $1,000 = $150,000.
A GRM is calculated by taking the property value and dividing it by monthly rent.
(Price / rent = GRM)
If a property in a neighborhood is valued at $175,000 and charges $1,000 in monthly
rent, then the GRM on that property is $175,000 divided by $1,000 = 175.
b. The other backup is referred to as a Gross Income Multiplier or GIM and is used for
commercial properties. The GIM is based on the annual rent for the property. It
works exactly like the GRM. |
|
|
Term
| cost approach to appraisal |
|
Definition
used for unique properties, such as churches or government buildings.
It is also used when there are no comparables for a particular property.
Land Value + Building Reproduction Cost – Depreciation = Value or
Land Value + Building Replacement Cost - Depreciation = Value
Reproduction cost would be the cost to exactly duplicate a building. Replacement cost is the
cost to build a building of similar size and usefulness using today’s methods and materials.
When using the cost approach, the appraiser uses the market data approach to place a value
on the land, because the value of the land is heavily dependent on location.
The cost approach is most accurate for new construction. |
|
|
Term
| three types of depreciation in the cost approach |
|
Definition
physical deterioration,
functional obsolescence and economic or external obsolescence. |
|
|
Term
| Physical deterioration(depreciation) |
|
Definition
ordinary wear and tear. It is curable. This has the least impact on the
appraisal because all buildings have it. (chipped paint, worn flooring) |
|
|
Term
|
Definition
brought about by factors in the property. It is often or mostly
curable. (inferior materials to cut costs, curb appeal, not enough baths/bedrooms) |
|
|
Term
|
Definition
a loss of value due to outside factors. This is also called external
obsolescence. It is incurable. (zoning, air pollution, noise, traffic, jobs, etc.) It is also called
environmental obsolescence. |
|
|
Term
principles of value
include: |
|
Definition
| Highest and Best Use, Principle of Substitution, Principle of Conformity, Principle of Increasing and Decreasing Returns, Principle of Contribution, The Principle of Regression, The Principle of Competition, The Principle of Change, The Principle of Anticipation |
|
|
Term
| principles of value Highest and Best Use |
|
Definition
the legal use that gives the greatest return in money and/or amenities.
(example: commercial parking is more valuable than residential parking) |
|
|
Term
| principles of value: Principle of Substitution |
|
Definition
Sets an upper limit on price. No person is justified in paying more
for a property when a similar substitute property can be purchased for less money, with
similar risks and yield. |
|
|
Term
| principles of value:Principle of Conformity |
|
Definition
States that maximum value is found when there is a reasonable
degree of similarity or sameness. Properties in the same neighborhood tend to conform in
price. |
|
|
Term
| principles of value: Principle of Increasing and Decreasing Returns |
|
Definition
Invest in property whenever each dollar
invested will return a dollar or more of increased value and stop when each dollar invested
returns less than a dollar in value. Do not over-improve a property. |
|
|
Term
| principles of value:Principle of Contribution |
|
Definition
the value of a part is determined by its contribution to the total
value of the property rather than by its’ cost. |
|
|
Term
| principles of value: The Principle of Regression |
|
Definition
the presence of lower valued properties in the neighborhood
leads to a decline in the value of your property. Conversely, the presence of higher valued
properties will increase the value of your property and this is called progression. |
|
|
Term
| principles of value: The Principle of Competition |
|
Definition
an increase in competition will result in decreased profits for
current providers. The more competition, the lower the price. |
|
|
Term
| principles of value: The Principle of Change |
|
Definition
Change is constant and is reflected in values. Appraisers must
make adjustments for changes in market conditions, and for time. An appraisal is only
considered to be good for six months. |
|
|
Term
| principles of value: The Principle of Anticipation |
|
Definition
purchase price is affected by the expectation of future appeal
and benefits. |
|
|
Term
In addition to the principles of value an appraiser must be aware of the other factors that can affect
value including |
|
Definition
market cycles, political actions, economic forces, physical or environmental forces and
sociological forces. |
|
|
Term
|
Definition
Combining several parcels of land into one The result is usually
increased usability and value of land. |
|
|
Term
| Differences in between asemblage and plottage use |
|
Definition
Although assemblage and plottage mean the same thing,
assemblage is more often used to describe the action while plottage is used to describe the
increased usability and price. |
|
|
Term
| The steps in the appraisal process are: |
|
Definition
1. State the purpose of the appraisal.
2. Collect and verify information about the property.
3. Estimate value using all three approaches, or as many approaches as needed to get the best
result.4. Reconcile the estimates by determining weighted averages. This step is necessary because
the third step will result in up to three different values. Reconciliation completes the
process of determining an exact number rather than a range of value.
5. Prepare the report. It may be oral, in a letter, on a form, or a narrative report.
Notably, Although there is no USPAP (Uniform Standards of Professional Appraisal Practice) requirement
for the use of a particular form for an appraisal, lenders will require the Fannie Mae appraisal form
if the purpose of the appraisal is to secure residential financing. |
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Term
| Differences in between chronological and effective age |
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Definition
Chronological age is the age of the property in years. Effective age tells the condition of the
property. |
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Term
| Square footage(appraisal) |
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Definition
appraisers measure the exterior walls, and never include unfinished space.
Price per square foot is the property sale price divided by the square footage. |
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Term
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Definition
the total area of a building measured from the exterior walls excluding uncovered
areas such as patios and courtyards. The area under the roof, including unfinished spaces
such as the attic and garages. |
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Term
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Definition
the amount of space required between the lot line and the building line. The
setback can be determined by zoning or deed restrictions. |
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Term
| Straight line method(appraisal) |
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Definition
a method of depreciation of equal annual installment amounts. For
example: $100,000 depreciated over 10 years would be $10,000 per year. Using this method,
you can calculate the depreciation of a property (depreciation is gone), or the depreciated
value of a property (depreciated value remains after depreciation is deducted). |
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Term
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Definition
| Member, Appraisal Institute |
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Term
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Definition
a pledge of real property as security for a promissory note. The action of
pledging real property as security for a debt is called hypothecation. The mortgagor borrows
the money and gives the mortgage as a pledge to the lender. The lender is called the mortgagee.
The mortgage is recorded, creating the lien. |
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