Definitions
The most probable price which a property should bring in an open and competitive market
Market Value
The legally permissible, physically possible, financially feasible, and maximally productive use.
Highest and Best Use
The process of developing an opinion of value
Appraisal
A loss in improvement value from any cause
Depreciation
The right of the government to take private property for public use
The right of the government to take private property for public use
Items that have been permanently attached to the real estate
Fixtures
When several similar goods or services are available, the one with the lowest price will attract the
greatest demand
Principle of substitution
True/False: Anyone with an opinion is considered an appraiser.
False
Which approach adds the depreciated value of the improvements to land value?
Cost Approach
The difference in value before and after a partial acquisition
Total Appraised Value/Compensation
Fixtures owned by the tenant
Trade Fixtures
Present value is created by the expectation of future benefits
Principle of anticipation
True/False: An appraisal can be misleading if it does not adequately explain the appraiser's reasoning.
True
Sale price divided by annual income
Capitalization Rate
What is determined by unit of Use, Title, and Contiguity?
Larger Parcel
All the interests, benefits, and rights inherent in the ownership of real estate
Real Property
The accronym for factors that create value
D.U.S.T.
A decline in value due to wear and tear
Physical Depreciation
The age-life method estimates depreciation when what is divided by economic life?
Effective Age
Which type of damages must be paid to an owner?
Compensable
The cost to build a structure of equivalent utility using modern materials
Replacement Cost
The value of the land in one use cannot be added to the value of improvements in another use.
Consistent Use
The process of determining a final value from the three approaches
Reconciliation
Which type of capitalization converts one year's income into value?
Direct Capitalization
Compensation is measured by which party's loss?
The owner