9780793161133

Preface

About the Authors

Influences on Real Estate Value

(12)

Learning Objectives

(1)

Introduction

(1)

Part One The Attributes of Land

(1)

Part Two The Four Forces

(11)

Social Forces

(2)

Economic Forces

(2)

Physical/Environmental Forces

(1)

Governmental Forces

(2)

Identification of Forces

(1)

Chapter 1 Review Questions

(3)

Legal Considerations in Appraisal

(18)

Learning Objectives

(1)

Introduction

(1)

Part One Fundamental Definitions of Legal Interests

(3)

Real Estate

(1)

Real Property

(1)

Personal Property

(1)

Fixture

(1)

Part Two Limitations on Ownership of Real Estate

(4)

Public Restrictions on Real Estate Ownership

(1)

Private Restrictions on Real Estate Ownership

(3)

Related Terms

(1)

Part Three Forms of Legal Interest

(2)

Fee Simple Estate

(1)

Partial Interests

(1)

Part Four Property Ownership Forms

(2)

Individual (Severalty)

(1)

Tenancies and Undivided Interests

(1)

Special Forms of Ownership

(1)

Part Five Forms of Legal Descriptions

(2)

Metes-and-Bounds Description

(1)

Government (Rectangular) Survey System

(1)

Lot-and-Block System

(1)

Monument System

(1)

Part Six Types of Title Transfers

(4)

General Warranty Deed

(1)

Special Warranty Deed

(1)

Quitclaim Deed

(1)

Chapter 2 Review Questions

(2)

Types of Value

(10)

Learning Objectives

(1)

Introduction

(2)

Objective Value

(1)

Subjective Value

(1)

Part One Value Versus Price

(1)

Price

(1)

Value

(1)

Part Two Types of Value

(4)

Market Value

(1)

Investment Value

(1)

Value in Use

(1)

Insurable Value

(1)

Assessed Value

(1)

Going Concern Value

(1)

Liquidation Value

(1)

Part Three Fundamental Conditions of Market Value

(4)

Buyer and Seller are Typically Motivated

(1)

Both Parties are Well-Informed

(1)

Reasonable Time

(1)

Payment in Cash

(1)

Normal Consideration

(2)

Chapter 3 Review Questions

(1)

Economic Principles

(14)

Learning Objectives

(1)

Introduction

(1)

Part One Economic Principles

(7)

Supply and Demand

(1)

Anticipation

(1)

Balance

(1)

Conformity

(1)

Surplus Productivity

(1)

Contribution

(1)

Increasing and Decreasing Returns

(1)

Change

(1)

Substitution

(1)

Consistent Use Theory

(1)

Opportunity Costs

(1)

Externalities

(1)

Highest and Best Use

(1)

Competition

(1)

Economics of Scale

(1)

Part Two Four Agents of Production

(1)

Land

(1)

Labor

(1)

Capital

(1)

Entrepreneurship

(1)

Part Three Economic Characteristics of Value

(5)

Utility

(1)

Scarcity

(1)

Desirability

(1)

Effective Purchasing Power

(1)

Demand Unit

(1)

Chapter 4 Review Questions

(3)

Real Estate Markets and Analysis

(20)

Learning Objectives

(1)

Introduction

(1)

Part One Districts and Neighborhoods

(4)

District

(1)

Neighborhood

(1)

The Four Value Forces

(1)

Life Cycle

(1)

Market Segmentation

(1)

Part Two Efficient/Inefficient Market

(1)

Part Three Market Analysis

(5)

Types of Market Analysis

(2)

Types and Sources of Data

(1)

Steps in Market Analysis

(2)

Part Four Monetary and Fiscal Policy

(2)

Credit Regulation Devices

(1)

Fiscal Policy

(1)

Part Five Money and Capital Markets

(1)

Money Markets

(1)

Capital Markets

(1)

Part Six Real Estate Finance

(7)

Mortgage Financing Terms

(2)

Types of Loans

(1)

Forms of Mortgages

(2)

Chapter 5 Review Questions

(3)

The Valuation Process

(20)

Learning Objectives

(1)

Introduction

(1)

Part One Definition of the Problem

(6)

Identification of Real Estate

(2)

Identification of the Real Property

(1)

Identification of the Value Addressed (Purpose)

(1)

Function of the Report

(1)

Date of Appraisal

(1)

Limiting Conditions and Assumptions

(1)

Identification of the Appraisal Report Format

(1)

Part Two Data Program (Scope)

(4)

Collection

(1)

Verification

(2)

Data Analysis

(1)

Part Three Highest and Best Use

(1)

Part Four Land Value

(2)

Sales Comparison Approach

(1)

Allocation

(1)

Extraction

(1)

Subdivision Analysis

(1)

Land Residual

(1)

Ground Rent Capitalization

(1)

Part Five Application of the Three Approaches

(2)

Cost Approach

(1)

Income Approach

(1)

Sales Comparison Approach

(1)

Part Six Reconciliation

(1)

Part Seven Submission of Report

(5)

Chapter 6 Review Questions

(4)

Real Estate Description

(18)

Learning Objectives

(1)

Introduction

(1)

Part One Land or Site Description

(3)

Tract Versus Site

(1)

Frontage

(1)

Size

(1)

Shape

(1)

Topography

(1)

Drainage

(1)

Functional Utility

(1)

Floodplain

(1)

Wetlands

(1)

Environmental Hazards

(1)

Utilities

(1)

Access

(1)

Part Two Improvement Description

(14)

Building Improvements

(4)

Site Improvements

103

(1)

Building Inspection

104

(1)

Residential Styles

105

(2)

Functional Utility

107

(2)

Energy Efficiency

109

(1)

Quality/Condition Survey

109

(1)

Actual Age

109

(1)

Effective Age

109

(1)

Chapter 7 Review Questions

110

(3)

Highest and Best Use

113

(12)

Learning Objectives

113

(1)

Introduction

113

(1)

Part One Definition of Highest and Best Use

114

(1)

Part Two Highest Present Land Value

114

(2)

Part Three Land as Though Vacant

116

(3)

Physically Possible

116

(1)

Legally Permissible

116

(1)

Financially Feasible

117

(1)

Maximally Productive

118

(1)

Part Four Property as Improved

119

(1)

Physically Possible

119

(1)

Legally Permissible

119

(1)

Financially Feasible

120

(1)

Maximally Productive

120

(1)

Part Five Related Concepts

120

(5)

Interim Use

120

(1)

Holding

121

(1)

Plottage

122

(1)

Excess Land

122

(1)

Surplus Land

122

(1)

Chapter 8 Review Questions

123

(2)

Appraisal Mathematics

125

(28)

Learning Objectives

125

(1)

Introduction

125

(1)

Part One Area and Volume Calculation

126

(5)

Area Calculation

126

(2)

Volume Calculation

128

(3)

Part Two Units of Comparison

131

(1)

Part Three Decimals, Percentages, and Fractions

132

(1)

Part Four Basic Statistical Analysis

133

(3)

Mean

134

(1)

Median

134

(1)

Mode

134

(1)

Range

135

(1)

Standard Deviation

135

(1)

Weighted Average

136

(1)

Part Five Adjustments

136

(11)

Dollar Adjustments

137

(3)

Percentage Adjustments

140

(2)

Sequence of Adjustments

142

(2)

Dollar versus Percentage Adjustments

144

(1)

Important Considerations in the Adjustment Process

145

(1)

Multiple Adjustments

146

(1)

Part Six Cash Equivalency

147

(6)

Points Paid by Seller

147

(1)

Favorable Seller Financing

147

(1)

Mortgage Buydowns

148

(1)

Favorable Financing From a Party Unrelated to the Transaction

148

(1)

Real Estate Commissions and Closing Costs

148

(1)

Chapter 9 Review Questions

149

(4)

Relationships Between Time and Money

153

(12)

Learning Objectives

153

(1)

Introduction

153

(1)

Part One Relationships Between Time and Money

154

(4)

Introduction to the Financial Calculator

154

(1)

Compounding (Future Value of $1)

155

(1)

Discounting (Present Value of $1)

156

(1)

Future Value of $1 per Period

156

(1)

Present Value of $1 per Period

157

(1)

Periodic Payment to Grow to $1 (Sinking Fund Factor)

157

(1)

Part Two Mortgage Calculations

158

(7)

Calculation of a Mortgage Payment

158

(1)

Calculation of a Mortgage Term

159

(1)

Calculation of a Mortgage Interest Rate

160

(1)

Calculation of a Mortgage Constant

161

(2)

Chapter 10 Review Questions

163

(2)

Land and Site Valuation

165

(14)

Learning Objectives

165

(1)

Introduction

165

(1)

Part One Underlying Economic Principles of Land and Site Valuation

166

(1)

Highest and Best Use

166

(1)

Substitution

166

(1)

Supply and Demand

166

(1)

Anticipation

167

(1)

Part Two Influences on Land and Site Valuation

167

(2)

Physical Characteristics

167

(1)

Zoning and/or Deed Restrictions

168

(1)

Availability, Capacity, and Proximity of Utilities

169

(1)

Site Improvements

169

(1)

Part Three Techniques for Site Valuation

169

(10)

Allocation

169

(2)

Extraction

171

(1)

Sales Comparison

172

(3)

Subdivision Development

175

(1)

Ground Rent Capitalization

175

(1)

Land Residual

176

(1)

Chapter 11 Review Questions

177

(2)

Cost Approach: Overview and Estimation of Cost New

179

(14)

Learning Objectives

179

(1)

Introduction

179

(1)

Part One Underlying Economic Principles of the Cost Approach

180

(1)

Substitution

180

(1)

Balance

180

(1)

Highest and Best Use

180

(1)

Externalities

181

(1)

Part Two Applications of the Cost Approach

181

(1)

Part Three Limitations of the Cost Approach

182

(1)

Part Four Procedure and Format of the Cost Approach

182

(2)

Part Five Preparation of a Cost Estimate

184

(9)

Distinction Between Reproduction Cost and Replacement Cost

184

(1)

Categories of Costs

184

(2)

Three Recognized Methods of Estimating Cost New

186

(2)

Sources of Cost Data

188

(2)

Chapter 12 Review Questions

190

(3)

Cost Approach: Estimation of Accrued Depreciation

193

(24)

Learning Objectives

193

(1)

Introduction

193

(1)

Part One Accrued Depreciation

194

(2)

Part Two Classifications of Accrued Depreciation

196

(2)

Physical Deterioration

196

(1)

Functional Obsolescence

197

(1)

External Obsolescence

197

(1)

Part Three Techniques for the Estimation of Accrued Depreciation

198

(19)

Economic Age-Life Method

198

(2)

Modified Economic Age-Life Method

200

(3)

Market Extraction or Sales Comparison Method

203

(3)

Breakdown Method

206

(9)

Chapter 13 Review Questions

215

(2)

Applied Sales Comparison Approach

217

(10)

Learning Objectives

217

(1)

Introduction

217

(1)

Part One Underlying Economic Principles

218

(1)

Substitution

218

(1)

Contribution

218

(1)

Part Two Strengths and Limitations

218

(2)

Strengths

218

(1)

Limitations

219

(1)

Special Purpose and Limited Market Properties

219

(1)

Part Three Sales Comparison Procedure

220

(1)

Part Four Units of Comparison

220

(1)

Part Five The Adjustment Process

221

(2)

Part Six Adjustment Extraction

223

(4)

Chapter 14 Review Questions

225

(2)

Income Approach

227

(16)

Learning Objectives

227

(1)

Introduction

228

(1)

Part One Underlying Economic Principles

228

(1)

Anticipation

228

(1)

Supply and Demand

228

(1)

Substitution

228

(1)

Externalities

229

(1)

Part Two Applications of the Income Approach

229

(1)

Scenario 1

229

(1)

Scenario 2

229

(1)

Part Three Methods of Income Capitalization

230

(3)

Gross Rent Multiplier

230

(1)

Direct Capitalization

231

(1)

Yield Capitalization

232

(1)

Part Four Estimation of Income and Expenses

233

(3)

Potential Gross Income (PGI)

233

(1)

Effective Gross Income (EGI)

233

(1)

Operating Expenses

234

(2)

Part Five Valuation by the Income Approach---Gross Rent Multiplier (GRM)

236

(7)

Procedure for Estimating Value Using a Gross Rent Multiplier

237

(3)

Applicability and Limitations of Gross Rent Multipliers

240

(1)

Chapter 15 Review Questions

241

(2)

Reconciliation and Final Value Estimate

243

(6)

Learning Objectives

243

(1)

Introduction

243

(1)

Part One Criteria of Reconciliation

244

(2)

Appropriateness

244

(1)

Accuracy

245

(1)

Quantity of Evidence

246

(1)

Part Two Selection of a Final Value Estimate

246

(3)

Chapter 16 Review Questions

248

(1)

Partial Interests

249

(6)

Learning Objectives

249

(1)

Introduction

249

(1)

Part One Fee Simple Estate

250

(1)

Part Two Partial Interests Created by a Lease

250

(2)

Leased Fee Estate

250

(1)

Leasehold Estate

250

(2)

Part Three Other Fractional Interests

252

(3)

Vertical Interests

252

(1)

Easements

252

(2)

Chapter 17 Review Questions

254

(1)

Appendix A Real Estate Appraisal Web Sites

255

(2)

Appendix B Valuation Technique Practice

257

(17)

Appendix C Case Studies

274

(32)

Appendix D Practice Exam

306

(9)

Appendix E Answers and Suggested Solutions

315

(16)

Glossary

331

(19)

Index

350

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Mastering Real Estate Appraisal

0793161134

Summary

Table of Contents

Supplemental Materials

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