Appraisal and property value terms and definitions Flashcards

Appraisal and property value terms and definitions Flashcards Insured valueIs the face amount a casualty or hazard insurance policy will pay in case a property is rendered unusable.Assessed valueThis is the value of a property as estimated by a taxing authority as the basis for ad valorem taxation AssemblageOr the conjoining of adjacent properties, sometimes creates a combined value that is greater than the values of the unassembled properties. The excess value created is called plottage value What makes an appraisal different from other estimates the value?It is the opinion of value supported by data and performed by a professional, dis-interested third-party.Plottage valueThis value is an estimate of the value at the process of assemblage adds to the combined values of the assemble properties.Salvage valueThis value refers to the nominal value of a property that has reached the end of its economic life. This value is also an estimate of the price at which a structure will sell if it is dismantled and moved.Reversionary valueThis is the value estimated selling price of a property at sometime in the future. This value is used most commonly in a proforma investment analysis where, at the end of a holding period, the property is sold and the investors capital reverts to the investor.Book valueIs the value of the property as carried on the accounts of the owner. The value is generally equal to the acquisition price plus capital improvements minus accumulated depreciation.Mortgage valueIs the value of the property as collateral for a loan.Reproduction valueThis is the value based on the cost of constructing a precise duplicate of the subject property is improvements, assuming current construction costs.SubdivisionThe division of a single property into smaller properties can also result in a higher total value. For instance, a 1 acre suburban site appraised at $50,000 maybe subdivided into for quarter acre lots worth $30,000 each.Steps in the appraisal processNumber one. Identify the purpose.Number two. Gather relevant data.Number three. Assess the highest and best use.Number four. Estimate the value of the land.Number five. Applied to three approaches to estimating value.Number five. Apply the three approaches to estimating value. Number six. Reconcile the values from the approaches.Number seven. Compile the report.

Three different appraisal approachesThe sales comparison approach, the cost approach, and the income capitalization approach Depreciated valueThis is the value established by subtracting accumulated depreciation from the purchase price of the property.Brokers opinion of valueThis value differs from a formal appraisal because it is not necessarily performed by a dis-interested third-party or a licensed professional. It generally uses only a limited form of one of the three appraisal approaches. In addition this type of opinion of value is not subject to regulation nor does it follow any particular professional standards.Rental valueIs an estimate of the rental rate a property can command for a specific period of time.Market valueThis is an estimate of the price at which a property will sell at a particular time. This type of value is the one generally sought in appraisals and used in brokers estimates of value.Condemned valueThis is the value said by the county or a municipal authority for a property which maybe taken by eminent domain.Leasehold valueIs an estimate of the market value of a leasees interest in the property.Market valueTheoretically it is the highest price that a buyer would pay and the lowest price that the seller would except for the property.Replacement valueThis is the value based on the cost of constructing a functional equivalent of the subject property improvements, assuming current construction costs.Appraised valueIs in appraisers opinion of a properties value.