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Real estate appraisal, property valuation or land valuation is the process of assessing the value of real property (usually market value). Real estate transactions often require appraisals because every property has unique characteristics.
If the value of the commercial lot as vacant in "House B" exceeds the value of house as a residence as improved plus demolition costs, the overall highest and best use of this property would be the as vacant value of the commercial lot. For example, assume that "House B" has a value as a house of $200,000, and a site value as a commercial lot ...
Comparables (or comps) is a real estate appraisal term referring to properties with characteristics that are similar to a subject property whose value is being sought. This can be accomplished either by a real estate agent who attempts to establish the value of a potential client's home or property through market analysis or, by a licensed or certified appraiser or surveyor using more defined ...
For example, if a real estate investment provides $160,000 a year in NOI and similar properties have sold based on 8% cap rates, the subject property can be roughly valued at $2,000,000 because $160,000 divided by 8% (0.08) equals $2,000,000. A comparatively higher cap rate for a property would indicate greater risk associated with the ...
At the onset of an assignment, an appraiser is obligated to gather certain specified preliminary data about the project, such as the nature of the property to be appraised, the basis of value (e.g. market, investment, impaired, unimpaired), the interests appraised (e.g. fee, partial), important assumptions or hypothetical conditions, and the ...
Cost approach is a real estate appraisal valuation method used to price an individual property. [1] It is one of three methods, the others being market approach, or sales comparison approach, and income approach.
An AVM is a residential valuation report that can be obtained in a matter of milliseconds. It is a technology-driven report. The product of an automated valuation technology comes from the analysis of public record data and computer decision logic combined to provide a calculated estimate of a probable value of a residential property.
This is simply the quotient of dividing the annual net operating income (NOI) by the appropriate capitalization rate (CAP rate). For income-producing real estate, the NOI is the net income of the real estate (but not the business interest) plus any interest expense and non-cash items (e.g. -- depreciation) minus a reserve for replacement.