 | Term | Definition |
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Anticipation |
Appraisal principle that holds that value can increase or decrease based on the expectation that some future event may or may not occur |
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Assemglage |
Combining of two or more adjoining lots into one larger tract to increase their total value |
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Conformity |
Appraisal principle that holds that the greater the similarity among properties in an area, the better they will hold their value |
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Cost Approach |
Process of estimating property value by adding to estimated land value the appraiser's estimate of the cost of the building new, less depreciation |
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Economic Life |
Number of years during which an improvement will add value to the land |
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Functional Obsolescence |
Loss of value to an improvement to real estate because of functional problem, often caused by changing tastes or poor design |
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Highest and Best Use |
Possible use of a property that would produce the greatest net income and thereby develop the highest value; making an office building where a parking lot once stood |
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Market Value |
Most probable price a property would bring in an arm's length transaction under normal market conditions on the open market; market price is what is actually paid |
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Progression, Regression |
Value of properties near a better property see their values rise; the opposite is regression; a rundown property will negatively affect neighboring properties |
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Reproduction Cost |
Construction cost at current prices of an exact duplicate of the subject property; i.e., using slate shingles on the roof instead of equally effective fiberglass shingle |
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Square-Foot Method |
Appraisal method of estimating building cost; multiplying number of square feet in the improvement by cost per square foot of recently constructed similar properties |
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Supply and Demand |
Interrelationship of availability of properties and desire for those properties; real estate is affected by marketplace just like most commodities |
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