appraisal
an estimate of the quantity, quality, or value of something. The process through which conclusions of property value are obtained; also refers to the report that sets forth the process of estimation and conclusion of value.
Uniform Standards of Professional Appraisal Practice (USPAP)
a set of standards that details information required in an appraisal of residential property. The Uniform Residential Appraisal Report is required by many government agencies.
competitive market analysis (CMA)
a comparison of the prices of recently sold homes that are similar to a listing seller's home in terms of location, style, and amenities.
broker's price opinion (BPO)
an opinion of real estate value commissioned by a bank or an attorney and provided by a broker.
state-licensed real property appraiser
may perform any appraisal that is not to be used in a federally related financial transaction and may perform appraisals for use in a federally related financial transaction in which the value of the transaction does not exceed $1 million.
state-certified residential property appraiser
may perform any appraisal that is not to be used in a federally related financial transaction and may perform appraisals for use in a federally related financial transaction without regard to transaction value.
state-certified general real property appraiser
may appraise any type of property for any purpose in Georgia.
market value
the most probable price that a property would bring in an arm's length transaction under normal conditions on the open market.
anticipation
the appraisal principle that holds that value can increase or decrease based on the expectation of some future benefit or detriment produced by the property.
change
the appraisal principle that holds that no physical or economic condition remains constant.
competition
the appraisal principle that states that excess profits generate competition.
conformity
the appraisal principle that holds that the greater the similarity among properties in an area, the better they will hold their value.
contribution
the appraisal principle that states 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.
highest and best use
he possible use of a property that would produce the greatest net income and, thereby, develop the highest value.
law of increasing returns
law that applies as long as money being spent on improvements produces an increase in income or value.
law of diminishing returns
law that applies at the point where additional improvements do not increase income or value.
plottage
the increase in value or utility resulting from the consolidation (assemblage) of two or mote adjacent lots into one larger lot.
assemblage
the combining of two or more adjoining lots into one larger tract to increase their total value.
regression
an appraisal principle that states that, between dissimilar properties, the value of the better-quality property is affected adversely by the presence of the lesser-quality property.
progression
an appraisal principle that states that, between dissimilar properties, the value of the lesser-quality property is favorably affected by the presence of the better-quality property.
substitution
an appraisal principle that states 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.
supply and demand
the appraisal principle that follows the interrelationship of the supply of and demand for real estate. Because appraising is based on economic concepts, this principle recognizes that real property, like any other commodity, is subject to the influences
sales and comparison approach
the process of estimating the value of a property by examining and comparing actual sales of comparable properties.
sales prices
the amount of money paid to a seller for a product bought.
cost approach
the process of estimating the value of a property by adding to the estimated land value the appraiser's estimate of the reproduction or replacement cost of the building, less depreciation.
accrued depreciation
loss in value resulting from the property's physical deterioration, external depreciation (decrease in price), and functional obsolescence.
reproduction cost
the construction cost at current prices of an exact duplicate of the subject property.
replacement cost new
the construction cost at current prices of a property that is not necessarily an exact duplicate of the subject property but serves the same purpose or function as the original.
depreciation
in appraisal, a loss of value in property due to any cause, including physical deterioration, functional obsolescence, and external obsolescence.
physical deterioration
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.
functional obsolescence
a loss of value to an improvement to real estate arising from functional problems, often caused by age or poor design.
external obsolescence
incurable depreciation caused by factors not on the subject property, such as environmental, social, or economic factors.
economic life
the number of years during which an improvement will add value to the land.