1.6 Real Estate The Business of Value

Market Comparison Approach

A means of comparing similar type properties, which have recently sold, to the subject property. Commonly used in comparing residential properties.

Market Comparison Approach:

A means of comparing similar type properties, which have recently sold, to the subject property. Commonly used in comparing residential properties.

Assessed Value

A valuation placed upon a piece of property by a public authority a basis for levying taxes on the property.

Cost approach

An analysis in which a value estimate of a property is derived by estimating the replacement cost of the improvements, deducting therefrom the estimated accrued depreciation, then adding the market value of the land.

Appraised Value

An evaluation of a property's value based on a given point in time that is performed by a professional appraiser during the mortgage origination process.

Income method-mainly used w/commercial propety.

Appraisers will use the net income. And apply it to the Capitalization Rate

*Pop Quiz* A non-profit organization in looking to purchase a church. An appraiser was hired to assess the value of the church. What appraisal method did the appraiser use...?

Cost Approach

*Pop Quiz* Improvements Typically ........in value?

Depreciate

*Pop Quiz* (T/F) Price is typically equal to the cost of the property

False

*Pop Quiz* Mark is looking to purchase a commercial office building. An appraiser was hired to assess the value of the building. What appraisal method did the appraiser use...?

Income Approach

Income Approach

One of the three methods of the appraisal process generally applied to income producing property, and involves a three-step process - (1) find net annual income, (2) set an appropriate capitalization rate or "present worth" factor, and (3) capitalize the income dividing the net income by the capitalization rate.

Depreciated Value

The basis of a depreciable asset used to compute the taxable gain from its sale; the basis is acquisition cost plus capital improvements less accrued depreciation.

Insured Value

The cost of replacing a structure completely destroyed by an insured hazard.

Assessed value or Taxes Values

The reasons for this confusing is because there are districts responsible are call the AAPPRAISAH DISTRICTS ( GENERATE ASSESSED VALUES, NOT APPRAISEL ) .

Market Value

What will this house sale for.

Value

is not the same as price or cost

Cost

money for the production of the property.

Price

that which is given up in an exchange to acquire a good or service