Accession in real estate refers to additions made to a property, either through the incorporation of fixtures or natural deposits, thereby enhancing its value over time.
Across the Fence is an appraisal technique used when evaluating property in condemnation situations, estimating the property's value based on the use of adjacent land.
Amenities refer to the nonmonetary benefits derived from property ownership that contribute to its desirability. This can include both tangible and intangible features such as pride of ownership, modern appliances, and fixtures.
An appraisal is a professional opinion or estimate of the value of a property, which is conducted by a trained and certified appraiser.
Appraisal by Comparison, also known as the Sales Comparison Approach, is a real estate valuation method that estimates a property's value based on the sale prices of similar properties in the same area.
Real estate appreciation refers to the increase in the value of a property over time. It can be influenced by a variety of factors including market demand, location, inflation, and property improvements. Appreciated value can enhance investment returns for property owners.
Appreciation refers to the increase in the value of a property over time, driven by various factors including inflation, demand pressures, physical additions, and improvements. Appreciation can significantly impact investment returns and tax obligations.
Arable land refers to land that is suitable for cultivation and farming. This land typically has rich soil and an appropriate climate for growing crops.
Asbestos is a mineral fiber that was once commonly used in a variety of building construction materials for insulation and as a fire-retardant. While its use has declined since the late 20th century due to health concerns, the presence of asbestos in older buildings remains a significant issue due to its potential health risks.
The asking price is the price a property seller lists when trying to attract potential buyers. It is the starting point for negotiations and is typically determined based on market conditions, property value, and other factors.
The assessment base, also known as the tax base when applied to property taxes, is the total value of the property within a jurisdiction that is subject to taxation. This term is crucial in understanding how municipalities calculate property taxes and fund essential services.
An Assessment Roll is a public record of the assessed value of property within a taxing jurisdiction. It is certified for completeness and accuracy by the tax assessor annually.
Assumptions and limiting conditions are specific stipulations and constraints under which an appraisal is conducted. These conditions provide a framework within which the valuation can be understood and accepted.
Bleeding a project refers to the unethical practices in real estate development or management where expenses and fees are overstated to increase profits or where routine maintenance is neglected to maximize current income at the expense of property value.
Book cost refers to the acquisition cost of property as recorded on accounting statements. It typically includes the purchase price, installation costs, and indirect costs such as interest during construction.
Capitalization rate, commonly referred to as Cap Rate, is a real estate valuation measure used to compare different real estate investments. It is calculated by dividing the net operating income (NOI) by the current market value of the property.
A capitalization rate (Cap Rate) represents the rate of return expected to be generated on a real estate investment property. It helps in deriving the property's current market value or the potential return on investment.
Consequential damages refer to the loss in value of a property caused by the taking of a nearby property or development on another property. These damages may not be directly caused by an action but occur as a consequence of it.
Contamination refers to the presence of harmful substances in real estate properties, which can significantly impact property value, usage restrictions, and potential health hazards. Identifying and addressing contamination are critical steps in real estate transactions, environmental assessments, and property development.
The 'Cost to Cure' is the amount of money required to remedy a cause of depreciation in a property. A curable defect is one for which the cost to correct is less than the value added by the correction.
Curable Depreciation refers to a type of property deterioration that can be corrected at a cost that is less than the value it will add to the property.
De Minimis Planned Unit Development (PUD) refers to a type of PUD where the common area characteristics have a minimal effect on the overall property value. These developments contain limited shared spaces and amenities.
Depreciated cost, also known as book value or adjusted tax basis, represents the value of a property after accounting for depreciation – the gradual reduction in the value of an asset over time. This figure is used in financial reporting and tax assessments to reflect the lowered worth of a property due to wear and tear, deterioration, or obsolescence.
Downzoning involves changing the zoning classification of a tract of land to a less intensive use than currently permitted. It can affect the owner's investment-backed expectations and may raise compensation issues.
Economic obsolescence refers to the decrease in property value caused by external factors, such as environmental changes or new developments. It is also known as external obsolescence or environmental obsolescence.
Environmental Obsolescence refers to a form of depreciation in property value due to external, environmental factors that negatively impact its desirability and usability.
Equity buildup refers to the gradual increase in a homeowner's equity or ownership stake in a property as debt principal is paid down through scheduled mortgage payments.
Exposure (Physical) refers to the direction in which a property or building faces, impacting light, heat, and overall energy efficiency.
External obsolescence, also known as economic obsolescence, refers to the depreciation in the value of a property due to external factors beyond the property owner's control, such as changes in the neighborhood, economic conditions, or local regulations.
A floodplain is a level land area subject to periodic flooding from a contiguous body of water. Floodplains often play a crucial role in environmental balance and can influence real estate development and insurance costs.
Frontage refers to the linear distance that a piece of land directly abuts along a defined edge, such as a lake, river, street, or highway. It is a significant factor in real estate appraisal, as it often correlates with the desirability and value of a property.
Functional Depreciation, also known as Functional Obsolescence, refers to the loss of property value due to its outdated or inefficient design, which adversely affects its utility, desirability, or functionality.
A Gain in real estate refers to an increase in the value or selling price of a property compared to its purchase price. This can result in a financial profit for the property owner.
A Guesthouse, also known as an accessory apartment, is a secondary housing unit on a single-family residential lot. These units provide additional living space and can serve a variety of purposes, including housing for guests, rental income, or living space for extended family.
A handyman’s special is a term used in real estate classified advertising, which generally refers to a house needing extensive repairs and remodeling, sold at a relatively low price. It offers potential for profit if the buyer can perform the necessary upgrades.
Improved land refers to property that has been enhanced with certain modifications and development activities to make it more useful and potentially more valuable compared to raw land.
Improvements refer to alterations made to raw land, such as the addition of buildings, streets, and sewage systems, which tend to increase the value of the property.
An independent appraisal is a value estimate provided by an individual who does not stand to benefit financially from the property's value or its income. The independence ensures the appraisal is impartial and objective, which is crucial for making informed financial decisions.
Inflation in real estate refers to the rise in property prices due to the diminished purchasing power of money over time. This effect can make real estate a popular choice as a hedge against inflation.
The term 'linkage' in real estate refers to the physical or economic connection, often pertaining to the time and distance between a land use and support facilities, or between people and their activities. Successful linkage leads to enhanced property value and better quality of life for residents.
The Loan-to-Value (LTV) ratio is a critical financial metric in real estate and lending that compares the loan amount to the appraised value of the property, influencing mortgage terms, interest rates, and approval processes.
The phrase 'Location, Location, Location' emphasizes that the location of a property is one of the primary factors influencing its value. The statement underscores that the geographical location outweighs almost all other variables in determining real estate prices.
Locational Obsolescence, also known as Economic Obsolescence, refers to the depreciation or loss in property value due to external factors related to its location, which are beyond the control of property owners.
Marketability refers to the speed or ease with which a property can be sold at or near its market value. It encompasses the property’s expected appeal in the market.
The millage rate is a tax rate applied to property, where each mill represents $1 of tax assessment per $1,000 of assessed property value.
A Narrative Report Appraisal provides a comprehensive and detailed examination of property value using expository and descriptive paragraphs, unlike more structured formats such as forms, letters, or tables.
A neighborhood is a district or locality characterized by similar or compatible land uses. They often have identifiable place names and boundaries composed of major streets, barriers, or abrupt changes in land use.
Net Leasable Area (NLA) refers to the total floor space within a building that is available for rent to tenants, excluding common areas such as hallways, elevators, and mechanical rooms. NLA is a crucial metric for property owners and investors to determine the rentable value of a commercial real estate property.
Normal wear and tear physical depreciation refers to the gradual loss of a property's value due to usage and aging, which includes minor damages, material degradation, and obsolescence occurring under normal usage conditions.
A nuisance refers to a land use or activity that is incompatible with surrounding land uses, potentially affecting the enjoyment or value of nearby properties. Zoning laws and private deed restrictions are utilized to control and prevent such nuisances.
Paper profit refers to the unrealized gain in value of a property which would be realized if the property were sold at its current market value. As long as the property remains unsold, the profit remains a 'paper' valuation and is not actual profit.
A provision in a mortgage that allows some of the property pledged to be freed from serving as collateral.
Plottage value refers to the increased value that results when multiple smaller adjacent plots of land are combined into a single larger plot. This increase in value is due to the greater potential utility and development options that the larger plot offers compared to the individual smaller plots.
In real estate, 'Price' refers to the amount of money that buyers and sellers agree upon for the exchange of property. While it represents the transactional amount, it can often differ significantly from 'Value,' which is an estimate or opinion of worth provided by an appraiser.
Regulatory taking occurs when government regulation limits the use of private property to such an extent that it effectively takes the property without direct compensation to the owner.
Rehabilitating a property involves restoring a structure to a condition of good repair, making it functional and habitable again, and potentially increasing its value.
A Restricted Appraisal Report is a type of valuation report containing minimal detail, intended solely for the client's use, and not for any other party. It stands in contrast to a more comprehensive Appraisal Report.
A retrospective appraisal estimates the value of a property at a specific point in the past, often for purposes such as tax assessments, legal disputes, or historical analysis.
A revaluation clause, often seen in reappraisal leases, allows for periodic reassessment of a property’s value during the lease term, enabling adjustments to rent reflective of current market conditions.
Revaluation or re-evaluation, also known as reassessment, is an updated appraisal process conducted to determine the current value of property for taxation and other purposes.
Rollback refers to the retroactive claim by a taxing authority of a higher tax rate when property is sold after being taxed at a special use rate or when the land is put to a more valuable use.
The sales price is the amount of money required to be paid for real estate according to a contract, or previously paid. It can include cash payments and assumptions of existing mortgages.
Setoff refers to special benefits arising from a condemnation that offset any damages that may have occurred to the property owner, balancing the advantages gained against the losses suffered.
Site improvements refer to modifications and enhancements made to a parcel of land to increase its usability, safety, and appearance, facilitating better utility of any structures built on it.
Special Benefits are those affecting the untaken portion of property in a partial condemnation, benefiting the owner disproportionately compared to the general area. The value of special benefits may reduce a condemnation award.
Staging refers to the process of preparing a residential property for sale through various means such as remodeling and interior decoration to enhance its marketability.
Stigma in real estate refers to a negative perception or image of a property, even after any associated problems have been resolved. This can significantly affect the property's value and marketability.
Tax Basis, also known as Basis (Tax), refers to the original value of a property or asset for tax purposes, with potential adjustments over time reflecting improvements, depreciation, or other factors.
Topography refers to the arrangement of the natural and artificial physical features of an area. It encompasses the terrain, elevation, and landforms, and significantly influences real estate value, construction feasibility, and property management.
Toxicity refers to the degree to which a substance can cause harm to an organism. In the real estate context, it often pertains to the contamination levels in properties, affecting their habitability and market value.
A real estate term used to describe a situation where the market value of a property is less than the outstanding balance on the mortgage. This condition can complicate selling the property or refinancing the mortgage.
An upside-down mortgage occurs when the balance of a mortgage loan is greater than the value of the property securing the loan. Homeowners with such mortgages have negative equity and cannot sell or refinance the property without incurring losses.
The valuation process is a systematic method used by appraisers to derive an estimate of the value of a property, essential for making informed real estate transactions.
In real estate, a yard refers to the outdoor area that surrounds a home or building. This can include front yards, side yards, and backyards, each offering unique opportunities for landscaping, leisure activities, and adding aesthetic value to the property.
