SALES COMPARISON APPROACH AND COST APPROACH
Terms in this set (27)
What is the go to approach for appraising residential property
Sales Comparison Approach
The property being evaluated is called the?
Similar properties recently sold are called..?
"Comps" or "Comparables"
In a Sales Comparison Approach, Appraisers Adjust the value of the property based on
"Comps" or "Comparables"
Cost Approach is when?
Appraiser estimates the reproduction cost of the improvements
One method of estimating cost of new construction is called a?
A Quantity Survey is a highly involved process of estimating cost of new construction by..?
detailing raw material and installation costs
Cubic foot or square foot method estimates costs based on..?
Dimensions of the property
Unit-Cost-In-Place method estimate..?
the installed price of components
Index method is an appraisel based on..?
What are the three types of deterioration?
Physical Deterioration, Functional Obsolescence, and Economic Obsolescence.
Physical Deterioration is..?
Internal loss of value (Inside the property lines) associated with wear and tear
Functional Obsolescence is
Internal loss of value (Inside the property lines) associated with design, layout, etc
Economic Obsolescence is..?
External, associated with forces outside the property lines
The Economic life/Theoretical life is a period of time from date of construction that the improvement..?
will add value to the land
how old the improvement appears to be
Actual or chronological age
how old it really is
Remaining Economic life is period of time from date of appraisal that the improvement will continue to add value to the land (T/F)
What is the first thing an appraiser does in a Cost Approach Equation?
Looks at the improvements of the house and decide what it would cost to build the improvements new.
What is the second thing an appraiser does in a Cost Approach Equation?
Subtract the Depreciation
What does an appraiser do with the depreciated value of the improvements?
add it to the value of the land, coming to the appraised value of the home.
Competitive Market Analysis is not an appraisal (T/F)
Competitive Market Analysis is a property evaluation using..?
using comparisons of recent sales
Land value is estimated whenever possible on the basis of the
sales price of comparable sites
Expectation is NOT an essential element of value
The most common method for estimating the cost of new construction is the cubic-foot or square-foot method, which estimates the cost based on the dimensions of the property (T/F)
A gold mine that is running out of gold would be an example of interim use, which is the highest and best use for the short term (T/F)