Real Estate Glossary
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is 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.
is a concept of land ownership which recognizes complete or absolute ownership of real estate by individuals. This ownership is considered free and clear with no encumberances or claims including government taxation.
is the soil that is deposited on a lands edge from the process of accretion.
Americans with Disabilities Act (ADA)
A federal law that is to eliminate discrimination against people with disabilities by allowing equal access to jobs, public accommodations, government services, public transportation, and telecommunications.
The 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.
the 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.
is 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:
the 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.