Appraisal
An estimate of the current value a property and uses cost approach, Income Approach , and sales comparison . The one that has more weight depends on type of property
Comparative 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.
Cost
The total expense for goods or services including money and time and labor.
Cost Approach
An appraisal technique that analyzes the cost to build.It calculates reproduction cost ,subtracts depreciation , and adds land value.
Depreciation
A decrease or loss in value
Direct Costs
Costs that can be specifically identified with a particular project or activity:labor and materials.
Evaluation
To study a property ,land utilization, highest and best use, supply and demand, and etc
External Obsolescence
Incurable depreciation caused by factors not on the subject property, such as environmental, social, or economic factors.
Functional Obsolescence
A loss in value due to conditions within the structure which make the building outdated when compared with a new building. (4 bedrooms and 1 bath, insulation, narrow stairway, etc.)
Highest and Best Use
The possible use of a property that would produce the greatest net income and thereby develop the highest value.
Income Approach
Approach to value in which the appraiser analyzes a property's ability to earn future income
Indirect Cost
A cost that cannot be easily and conveniently traced to a specified cost. It excludes labor and materials::attorneys,appraisers, surveyors, and etc
Insured Value
The cost of replacing a structure completely destroyed by an insured hazard. and improvements
Investment Value
Property value is based on the financial return.
Market Value
The price at which property would sell
Plottage
The added value as a result of combining two or more properties into one large parcel.
Price
The amount of money exchanged for a good or service
Sales Comparison Approach
Used when valuing residential homes or land.
3-5 comps are found, adjustments are made to comps.
If subject property is superior, appraiser will subtract from comps.
If subject property is inferior, appraiser will add to comps.
Negative features = add to
Value In Use
The owner of a property subjective estimate of the benefits of the asset determines the value .or the current use of the property
Valuation
An opinion of value of a property using objective approach:insurance value, mortgage value,and etc
Net Income
The difference between total revenue and total expenses when total revenue is greater
Net Operating Income (NOI)
The income projected for an income-producing property after deducting losses for vacancy and collection and operating expenses.
Potential Gross Income (PGI)
The total annual income the property would produce if it were fully rented and had no collection losses.
Effective Gross Income (EGI)
The total annual income the rental property produces after subtracting vacancy losses and adding miscellaneous income.
Gross Income Multiplier
Property value divided by annual income.
Gross Rent Multiplier
Price divided by rent