Chpt 8 - Chapter 8 Valuation Using the Sales Comparison...

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Chapter 8 Chapter Objectives What is an appraisal? Different value concepts Appraisal methodology Sales approach methodology, assumptions, calculations Cost approach methodology, assumptions, calculations Other types of appraisal techniques Appraisal example (take notes) What is an appraisal? An appraisal is an unbiased written estimate of the ___ market value of a property, usually referred to as the ______ property, at a particular point in time. The appraisal report is the ________ the appraiser submits to the client and contains the appraiser’s final _____________, the ______ upon which the estimate is based, and the ______________ used to arrive at the estimate. Appraisal practices are typically focused on either residential or commercial. Who Uses Market Value Appraisals? Buyers Sellers Corporate acquisitions, mergers or dissolutions Courts ______________ Eminent domain cases Settlement of estates Bankruptcy Mortgage Lenders – on almost all loans Why are Appraisals Necessary? 1
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Unlike stock market… Few transactions available to indicate value Every property is _______ Unique location Many and varied attributes Large value of the asset makes errors costly Different Value Concepts Market value: Most probable selling price, assuming “______” sale conditions. Value for the _______ market participant. Investment value: Value to a ___________ individual (investor) These two values are linked through the _______________________ that determines transaction prices. Transaction price: Price actually paid for a specific property. “Sold” prices that occur in the past. Uniform Standards of Appraisal Practice (USPAP) USPAP - required and followed by all states and federal regulatory agencies. Imposes ethical obligations and minimum appraisal standards
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Chpt 8 - Chapter 8 Valuation Using the Sales Comparison...

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