Property Valuation Types

Play an AI-generated podcast conversation about this lesson

What type of valuation is based on the cost of constructing an exact duplicate of the subject property's improvements?

Insured Value

Replacement Value

Market Value

Reproduction Value (correct)

Which value represents what taxing authorities use as the basis for ad valorem taxation?

Assessed Value (correct)

Book Value

Depreciated Value

Salvage Value

What is the estimated price at which a property will sell at a particular time?

Replacement Value

Reproduction Value

Salvage Value

Market Value (correct)

Which value considers how much it would cost to construct a functional equivalent of the subject property's improvements?

Replacement Value Signup and view all the answers

What value represents how much money owners have invested into their properties?

Book Value Signup and view all the answers

Which type of valuation represents income properties using capitalized cash flow generated by them?

Investment Value Signup and view all the answers

What is the face amount that an insurance policy will pay if the property becomes unusable?

Insured Value Signup and view all the answers

Established by subtracting accumulated depreciation from the purchase price of a property is the:

Depreciated Value Signup and view all the answers

What value is a nominal estimate when a structure has reached its economic life?

Salvage Value Signup and view all the answers

What influences the value of a property according to the text?

Improvements and neighboring properties Signup and view all the answers

What is the purpose of applying a suitable capitalization rate in real estate valuation?

To derive the property value after calculating the NOI Signup and view all the answers

What is the main difference between Gross Rent Multipliers (GRMs) and Capitalization Rates in real estate valuation?

GRMs focus on gross rent estimates, while Capitalization Rates focus on net operating income Signup and view all the answers

In a Comparative Market Analysis, what role do adjustments play when comparing properties?

Adjustments compensate for any differences between the subject property and comparables Signup and view all the answers

What is the main requirement set by FIRREA for appraisals in federally-related transactions?

The appraisal must be conducted by competent and supervised individuals Signup and view all the answers

Which organization establishes competency standards for appraisers through USPAP?

The Appraiser Qualifications Board of the Appraisal Foundation Signup and view all the answers

What specific requirement does USPAP set for appraisers regarding reporting?

Accurate reporting of outcomes Signup and view all the answers

In real estate valuation, what does the Gross Rent Multiplier (GRM) formula involve?

Dividing the property price by the monthly rental amount Signup and view all the answers

What is one of the steps involved in determining an estimated value output during a Comparative Market Analysis?

Reconciling all adjusted values with those of different subjects Signup and view all the answers

What does FIRREA stand for?

Financial Institutions Reform, Recovery and Enforcement Act Signup and view all the answers

What factors are included in the requirements for market value?

Cash transaction, reasonable market exposure, unrelated parties Signup and view all the answers

Which area is considered in the Gross Living Area (GLA) measurement?

The total area of all rooms above grade excluding stairwells Signup and view all the answers

What is the minimum required ceiling height for a space to be included in GLA measurements?

7 feet Signup and view all the answers

Which area is typically excluded from Gross Living Area (GLA) measurements?

Garage areas Signup and view all the answers

Which of the following is an essential element of depreciation?

Loss of value from wear and tear Signup and view all the answers

What distinguishes between curable and incurable functional obsolescence?

Cost to cure compared to the resulting contribution to value Signup and view all the answers

What does the Cost Appraisal Approach involve?

Calculating replacement costs for enhancements and adding back land value Signup and view all the answers

Which type of valuation represents the face amount that a casualty or hazard insurance policy will pay if the property becomes unusable?

Insured Value Signup and view all the answers

What value is established by subtracting accumulated depreciation from the purchase price of a property?

Book Value Signup and view all the answers

Which value represents an estimate for what price someone could buy a structure for if they dismantled and moved it elsewhere?

Salvage Value Signup and view all the answers

What type of valuation considers how much it would cost to construct a functional equivalent of the subject property's improvements?

Replacement Value Signup and view all the answers

Which value is used as the basis for ad valorem taxation by taxing authorities?

Assessed Value Signup and view all the answers

What value represents the cost of constructing an exact duplicate of the subject property's improvements?

Reproduction Value Signup and view all the answers

What value is based on the income properties generate and is calculated using capitalized cash flow?

Investment Value Signup and view all the answers

Which value considers how much it would cost to construct a functional equivalent of the subject property's improvements, assuming current construction costs?

Replacement Value Signup and view all the answers

Which type of valuation is an estimated price at which a property will sell at a particular time, generally sought in appraisals?

Market Value Signup and view all the answers

What is the main purpose of applying a suitable capitalization rate in real estate valuation?

To determine the estimated value of a property Signup and view all the answers

What is the main requirement set by FIRREA for appraisals in federally-related transactions?

State-certified appraisers to perform appraisals Signup and view all the answers

What represents how much money an investor is willing to pay for a property based on the expected future income stream?

Anticipation Signup and view all the answers

What does the Gross Rent Multiplier (GRM) formula involve in real estate valuation?

Multiplying the property price by the monthly rental amount Signup and view all the answers

Why may Gross Rent Multipliers (GRMs) not always produce precise value estimates?

Because they are based on market data Signup and view all the answers

What is the main focus of utilizing acknowledged appraisal techniques according to USPAP?

Achieving precision in value estimates Signup and view all the answers

Which principle states that investors won't pay more for a property with a certain income stream than for another with similar returns?

'Substitution' principle Signup and view all the answers

What regulation requires that all appraisals used in federally-related transactions be performed by state-certified appraisers?

'FIRREA' regulation Signup and view all the answers

How do investors determine the value of a property using Gross Rent Multipliers (GRMs)?

Multiplying the property price by the monthly rental amount Signup and view all the answers

What is one of the steps involved in identifying comparables for a Comparative Market Analysis?

Never make any changes to the subject property itself. Signup and view all the answers

What is a key requirement for market value according to the text?

The transaction must be conducted at arm's length. Signup and view all the answers

What does Gross Living Area (GLA) measure in a property?

Only above-grade rooms with exterior walls included. Signup and view all the answers

In cost appraisal, what is the difference between Reproduction and Replacement costs?

Reproduction involves creating an exact replica, while Replacement generates a functional equivalent. Signup and view all the answers

What does depreciation in real estate valuation involve?

Loss of value from physical wear and tear, functional obsolescence, or economic obsolescence. Signup and view all the answers

What should an appraiser consider when selecting comparables for adjustments?

Avoid adjusting superior comparables but adjust those inferior. Signup and view all the answers

Which aspect is necessary for a space to be included in Gross Living Area (GLA) calculations?

At least 50% of ceiling area with a height of 7 feet or more. Signup and view all the answers

What is considered an essential element of depreciation in real estate valuation?

'Functional obsolescence' due to outdated features. Signup and view all the answers

What role do adjustments play in the Sales Comparison Approach?

'Add if Superior, Subtract if Inferior' rule applies to adjustments. Signup and view all the answers

'Curable' and 'Incurable' distinctions are related to which type of depreciation according to the text?

'Functional Obsolescence'. Signup and view all the answers

'Land worth', 'Replacement costs for enhancements', 'Overall depreciation', and 'Depreciated improvement costs' are stages in which real estate appraisal approach?

'Cost Appraisal Approach'. Signup and view all the answers

Property Valuation Types

Choose a study mode

Podcast

Questions and Answers

What type of valuation is based on the cost of constructing an exact duplicate of the subject property's improvements?

Which value represents what taxing authorities use as the basis for ad valorem taxation?

What is the estimated price at which a property will sell at a particular time?

Which value considers how much it would cost to construct a functional equivalent of the subject property's improvements?

What value represents how much money owners have invested into their properties?

Which type of valuation represents income properties using capitalized cash flow generated by them?

What is the face amount that an insurance policy will pay if the property becomes unusable?

Established by subtracting accumulated depreciation from the purchase price of a property is the:

What value is a nominal estimate when a structure has reached its economic life?

What influences the value of a property according to the text?

What is the purpose of applying a suitable capitalization rate in real estate valuation?

What is the main difference between Gross Rent Multipliers (GRMs) and Capitalization Rates in real estate valuation?

In a Comparative Market Analysis, what role do adjustments play when comparing properties?

What is the main requirement set by FIRREA for appraisals in federally-related transactions?

Which organization establishes competency standards for appraisers through USPAP?

What specific requirement does USPAP set for appraisers regarding reporting?

In real estate valuation, what does the Gross Rent Multiplier (GRM) formula involve?

What is one of the steps involved in determining an estimated value output during a Comparative Market Analysis?

What does FIRREA stand for?

What factors are included in the requirements for market value?

Which area is considered in the Gross Living Area (GLA) measurement?

What is the minimum required ceiling height for a space to be included in GLA measurements?

Which area is typically excluded from Gross Living Area (GLA) measurements?

Which of the following is an essential element of depreciation?

What distinguishes between curable and incurable functional obsolescence?

What does the Cost Appraisal Approach involve?

Which type of valuation represents the face amount that a casualty or hazard insurance policy will pay if the property becomes unusable?

What value is established by subtracting accumulated depreciation from the purchase price of a property?

Which value represents an estimate for what price someone could buy a structure for if they dismantled and moved it elsewhere?

What type of valuation considers how much it would cost to construct a functional equivalent of the subject property's improvements?

Which value is used as the basis for ad valorem taxation by taxing authorities?

What value represents the cost of constructing an exact duplicate of the subject property's improvements?

What value is based on the income properties generate and is calculated using capitalized cash flow?

Which value considers how much it would cost to construct a functional equivalent of the subject property's improvements, assuming current construction costs?

Which type of valuation is an estimated price at which a property will sell at a particular time, generally sought in appraisals?

What is the main purpose of applying a suitable capitalization rate in real estate valuation?

What is the main requirement set by FIRREA for appraisals in federally-related transactions?

What represents how much money an investor is willing to pay for a property based on the expected future income stream?

What does the Gross Rent Multiplier (GRM) formula involve in real estate valuation?

Why may Gross Rent Multipliers (GRMs) not always produce precise value estimates?

What is the main focus of utilizing acknowledged appraisal techniques according to USPAP?

Which principle states that investors won't pay more for a property with a certain income stream than for another with similar returns?

What regulation requires that all appraisals used in federally-related transactions be performed by state-certified appraisers?

How do investors determine the value of a property using Gross Rent Multipliers (GRMs)?

What is one of the steps involved in identifying comparables for a Comparative Market Analysis?

What is a key requirement for market value according to the text?

What does Gross Living Area (GLA) measure in a property?

In cost appraisal, what is the difference between Reproduction and Replacement costs?

What does depreciation in real estate valuation involve?

What should an appraiser consider when selecting comparables for adjustments?

Which aspect is necessary for a space to be included in Gross Living Area (GLA) calculations?

What is considered an essential element of depreciation in real estate valuation?

What role do adjustments play in the Sales Comparison Approach?

'Curable' and 'Incurable' distinctions are related to which type of depreciation according to the text?

'Land worth', 'Replacement costs for enhancements', 'Overall depreciation', and 'Depreciated improvement costs' are stages in which real estate appraisal approach?

More Like This

Real Estate Valuation Methods

Real Estate Valuation

Real Estate Appraisal Introduction

Real Estate Appraisal Techniques