Real Estate Glossary
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allocation methodis the process of identifying how the market allocates value between the land and the improvements made to the land. This method is based on the economic principle of balance, which states that maximum values are achieved when the agents of production (land, labor, capital management) are in balance. Simply put, there is an identifiable relationship or ratio between the value of the improvements and the value of the land. | ||
allodial | ||
alluvionis the soil that is deposited on a lands edge from the process of accretion. | |
amortized loanThe payment in an amortized loan partially pays both principal and interest. The word amortize literally means to kill off so they are paid off slowly, over time, in equal payments. | |
annexationprocess of converting personal property into real property. | |
anticipationthe value associated with a real estate purchase anticipates that the need or desire satisfied by the purchase will continue for the foreseeable future. Buyers also anticipate that the property will appreciate and that they will achieve financial rewards as their equity increases in the property. The principle of anticipation is a factor in the selection process as the typical purchaser chooses from among the comparable or substitute properties. | |
antitrust lawslaws designed to preserve the free enterprise of the open marketplace by making illegal certain private conspiracies and combinations formed to minimize competition. Examples are price-fixing and allocation of customers or markets. | |
appraisal processis an orderly procedure followed by appraisers when estimating a value that is accurate, supportable, and defensible. Appraisers must adhere to professional regulations and standards mandated by the Appraisal Standards Board, presented in the provisions of the Uniform Standards and Professional Appraisal Practice (USPAP) and state appraisal boards. The appraisal process consists of the following six steps:
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appraisal purposethe appraiser must identify and define the specific value sought, the purpose of the appraisal, in the appraisal assignment. The value sought will influence the selection of the relevant data. Market value is the typical purpose of an appraisal but an appraiser must determine in the first step of the appraisal process if client might need any other purpose. Value could be needed for insurance purposes, liquidation or some other need. | ||