RE Midterm 1
what affects value
Utility, Scarcity, Desire and Effective Purchasing Power
what estate represents the full bundle of rights
life estate
Three approaches to value
(1) The Sales Comparison Approach, (2) The Cost Approach, (3) The Income Approach.
8 steps of the valuation process
1. identify the appraisal problem 2. determine the required scope of work 3. collect data and describe property 4. perform data analysis 5. determine value of land 6. apply 3 approaches to valuation 7. reconcile indicated values from three approaches 8. report final value estimate
What are the bundle of rights?
A term used to describe an owner's legal rights in land - right to sell, lease, occupy, mortgage, and create a life estate
Agents of Production
Land, Labor, Capital, Entrepreneurial Coordination
Difference between cost and price
Price is a fact set value agreed upon. Cost is amount of money needed to replace or build
what are the 4 powers of government that imposes restrictions on Real Estate
Taxation, eminent domain, police power, escheat