Glossary of Terms - Select Appropriate Category to View Additional Data
Definitions are referenced from various governmental real estate sites,
IAAO
Appraisal Methods
The three methods of appraisal, that is, the cost approach,
income approach, and sales comparison approach.
Appraisal Principles
The economic concepts underlying appraisal. See under
principle of: anticipation, balance, change, conformity, contribution, and substitution.
See also competition; demand; highest and best use; and variable proportions, law
of diminishing return.
Appraisal Ratio
(1) The ratio of the appraised value to an indicator
of market value. (2) By extension, an estimated fractional relationship between
the appraisals and market values of a group of properties. See also level of appraisal.
Appraisal Ratio Study
A ratio study using independent expert appraisals as
indicators of market value.
Appraisal Report
The oral or written communication of a completed appraisal.
Appraisal Standards Board
The division of The Appraisal Foundation that develops,
publishes, interprets, and amends the Uniform Standards of Professional Appraisal
Practice on behalf of appraisers and users of appraisal services.
Appraisal, Acquisition
An appraisal to determine the market value of a property
that is to be taken by eminent domain, so that the owner might be justly compensated.
Appraisal, Complete
The act or process of estimating value or an estimate
of value performed without invoking the departure provision (USPAP).
Appraisal, Composite
An appraisal of an integrated property as a single
entity rather than as a number of fractional parts. Note: A composite appraisal
is usually made by capitalization of income, by the stock and debt technique, or
by analysis of sales data. Logically, the term "unit appraisal" should be used to
convey this meaning, but it is sometimes used, with resulting confusion, to mean
an appraisal based on unit cost or unit value. Compare appraisal, summation.
Appraisal, Fractional
(1) An independent appraisal of a fractional part of
a property; for example, the appraisal of a building separately from the land by
use of the depreciated reconstruction cost method. (2) An appraisal of part of an
integrated property without reference to the value of the whole. (3) An appraisal
of a partial interest; an appraisal of the divided or undivided rights in property
that represent less than the whole.
Appraisal, Limited
The act or process of estimating value or an estimate
of value performed under and resulting from invoking the departure provision (USPAP).
Appraisal, Summation
An appraisal of a whole property by adding together
two or more fractional appraisals, for example, the appraisal of a parcel of improved
land by adding the estimated depreciated reproduction cost of the building to the
estimated value of the land as determined by comparison with other land values in
the community. Note: The result of a summation appraisal will generally differ somewhat
from that of a composite appraisal.
Appraised Value
The estimate of the value of a property before application
of any fractional assessment ratio, partial exemption, or other adjustments.
Appraiser Licensing and Certification
A procedure whereby appraisers gain permission from
the state to practice without supervision by demonstrating appropriate pre-licensing
skills and by agreeing to maintain and improve their skills and to conduct themselves
in accordance with professional standards at all times.
Appraiser Qualifications Board
The division of The Appraisal Foundation that establishes
education, experience, and other criteria for licensing, certification, and reclassification
of qualified appraisers.
Appreciation
Increase in value of a property, in terms of money,
from causes other than additions and betterments. For example, a farm may appreciate
if a shopping center is built nearby, and property of any sort may appreciate as
a result of inflation. Contrast depreciation.
Appurtenance
In appraisal, an appurtenance is any addition to a
property that becomes a part of that property. Generally, an appurtenance differs
from a fixture in that the fixture was once personal property.
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