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What is an appraisal?
An opinion of value
What are two basic categories of value?
Utility and market value
What kind of value is utility value?
It is a subjective vauluation as it is directed toward a particular use
What type of value is market value?
What are the four essential elements of value?
For demand to be effective what must it be supported by?
What is utility?
The capacity to satisfy a need or a desire
What are the two most effective ways to stabilize values according to the principals of conformity?
- Land Use Regulations
What is the 2 principals of conformity?
- Uses are compatible
- There is a reasonable degree of architectural harmony
What is the first step an appraiser must take when appraising vacant land?
Highest and Best Use
What is a temporary and acceptable use of land called that is not its highest and best use?
Principals of progression and regression state what?
- a less expensive house will be valued more among more expensive houses and conversely
- a more expensive house will be valued less among less expensive houses.
What is the principle of contribution?
a component part of a property is valued in proportion to its contribution to the value of the whole property. Ex: remodeled kitchen
The principal of anticipation state that the value is created by anticipated.....
future benefits to be obtained from the property... this is often used with income approach
What are the four-stage life cycles that all properties and neighborhoods go through?
What are the four great forces that have been recognized to create, maintain, modify, and destroy value as they interact?
- Physical and Environmental characteristics
- Economic influences
- Political and Government regulations
- Social ideals and standards
What are some examples of physical characteristics?
- availability of public transportation
- schools, churches, shopping and the presence of physical hazards in the area
What are some examples of environmental influences?
- Natural barriers to future development
What re some examples of social ideal and standards that affect value?
- growth and decline,
- rates of birth and death
- marriage and divorce
- attitudes toward education
What are some examples of economic influences?
- Natural resources
- levels of employment
- economic base
- development trends
What are some examples of political and governmental regulations?
- Building Codes
- Zoning Laws
- Environmental Restriction
- Rent Controls
What is a Plottage increment?
- An added increment of value that is achieved when two or more contiguous units are placed under one ownership
- Akin to have a monopoly