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