Adjustments
Additions or subtractions from a
comparable sale price or cost which are required to make the comparable property more directly comparable to the subject property.
Accrued depreciation
In cost appraisal, the identification and measurement of reductions
in the current market value of a property from today's reproduction cost.
Appraisal
An unbiased written estimate of
the fair market value of a property.
Appraisal report
The document the appraiser submits to the client and contains the appraiser's final estimate of market value, the data upon which the estimate is based, and the calculations used to arrive at the estimate
Arm's-length transaction
A transaction between two parties that have no relationship
with each other and who are negotiating on behalf of their own best interests. A fairly negotiated transaction and reasonably representative of market value.
Comparable properties
Properties similar to
the subject property used in the sales comparison approach to calculate a single indicated value for the subject property.
External obsolescence
Losses of property value caused by forces or conditions beyond the
borders of the property. The losses are deducted from a building's reproduction cost in the cost
approach to estimating market value.
Final adjusted sale price
The price paid for a comparable property in the sales comparison approach, adjusted for all conditions and characteristics to approximate the subject property and the current date.
Functional obsolescence
Losses in value of a building relative to its reproduction cost because the building is not consistent with modern standards or with current tastes of the market.
Highest and best use
The use of a property
found to be (1) legally permissible, (2) physically possible, (3) financially feasible, and (4) maximally productive.
Indicated value
The final value estimate for
the subject property resulting from application of one of the major approaches in the appraisal process.
Investment value
The value of the property to a particular investor, based on his or her specific requirements, discount rate, expectations, and 3000.
Market-adjusted normal sale price
Normal sale price" adjusted for changes in market conditions between the date of sale and the date of appraisal of the subject property
Market value
The price a property should sell
for in a competitive market when there has been a normal offering time, no coercion, arm'slength
bargaining, typical financing, and informed buyers and sellers.
Nonrealty items
Items of personal property
Normal sale price
The transaction price of a
comparable property adjusted for nonmarket financing and non-arm's-length bargaining (conditions of sale).
Physical deterioration
Loss of value of a building from its reproduction cost, resulting from wear and tear over time.
Property adjustments
Five sale price adjustments made to comparable property transactions prices: location, physical characteristics, legal characteristics, use, and nonrealty items.
Reconciliation
The process of forming a single point estimate from two or more numbers. It is used widely in the appraisal process. For example, in the sales comparison approach to develop a single indicated value from several final adjusted sale prices of comparables,
Replacement cost
The cost to build a new building of equal utility to an existing building
that is not an exact physical replica of the existing building.
Reproduction cost
The cost to build a new building that is exactly like an existing building in every physical detail.
Subject property
The property for which an appraisal of fair market value is produced
Transaction price
The prices observed on sold properties.
Uniform Standards of Professional Appraisal
Practice (USPAP)
Rules governing the appraisal process and reporting of appraisals that are developed by the Appraisal Standards Board of the Appraisal Foundation. Appraisers are obligated by law to follow these rules and guidelines.