|
Glossary
A-C | D-F
| G-I | J-L |
M-O | P-R | S-U
| V-Z
Absorption Rate
The number of properties of a particular kind that can be
sold in a specific real estate market per a defined time period.
Acre
A measure of land area; 43,560 square feet
Affidavit of Property Value
In Arizona every real estate sale (except for certain exempt
transactions, such as: title clarifications and government
transfers) is required by law to have an “Affidavit of
Property Value” recorded, aka Affidavit of Sale. This
Affidavit includes: grantor and grantee names and addresses
and whether or not they are related parties, sale price and
terms, Assessor’s parcel number(s), legal description,
partial interests, personal property included, title company
if any, notarized signatures, recording number(s), property
type, type of deed, and property address if any. This document
is generally filled out by the title company, if one is involved,
and generally appears to have reliable information.
Appraisal
An opinion of value. It is an analysis, opinion, or conclusion
relating to the nature, quality, value, or utility of specified
interests in, or aspects of, identified real estate. In developing
an appraisal the appraiser: (1) gathers data, (2) analyzes
that data, and (3) draws logical conclusions therefrom.
Appraisal Foundation, The
An organization, consisting of various national appraisal
organizations, empowered by the Financial Institutions Reform,
Recovery, and Enforcement Act (1989). It is responsible for
setting minimum standards and qualifications for appraisers.
Capitalization Rate
The rate that reflects the relationship between the value
of a property and its net operating or rental income. See
Income Approach. Mathematically, it is the result of dividing
a property’s net income by its value. It is sometimes
called a rate-of-return or return-on-investment.
Comparable
A property, similar in character to the property being appraised
(the subject), from which market value, market rents, etc.
may be derived, which in turn are used to estimate subject
value or a value compenent.
Cost Approach
One of the 3 major approaches to value estimation. It is based
on the idea that the value of a property is equal to the value
of the land plus the cost of all the additions less depreciation
from all causes. Generally people will not pay more for
a property than it would otherwise cost to buy a similar site
and build a similar addition upon it. Therefore, under
stable market conditions, this approach tends to set
an upper limit to value.
In summary:
+ cost new
- accumulated depreciation
+ land value
= value by cost approach
|
