Chapter 14 Valuation and Appraisal

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New Jersey Real Estate for Salespersons and Brokers

By Marcia Darvin SpadaThomson/South-Western

Copyright, 2006

Chapter 14 Valuation and Appraisal

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Chapter 14 Valuation and Appraisal

Chapter 14 Valuation and Appraisal

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Chapter 14 Key Terms Anticipation Appraisal Comparative market

analysis Contribution Cost approach Depreciation Evaluation

Functional obsolescence Highest and best use Income approach Market value Sales comparison

approach Substitution

Chapter 14 Valuation and Appraisal

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Characteristics of Real Property

Transferability

Effective Demand

Utility

Scarcity

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Factor Affecting Value

Economic

Governmental

Physical

Social

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Economic Influences on ValueAnticipationChangeSubstitutionUse- highest and bestConformityIncreasing/diminishing returns

PlottageContributionCompetitionDepreciationAge

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Types of Value$ Market$ Investment$ Insurance$ Value in use$ Assessed$ Mortgage

Most appraisals estimate market value

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Residential Market Analysis

MarketPosition

BuyerAppeal

Expired properties

Competing properties

Marketvalue range

Terms

Assets/drawbacks

ResidentialMarket

Analysis

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Appraisal Approaches to Value

Appraisal unbiased estimate of value as of a certain date

Sales comparison Cost Income

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Appraisal ReportingNarrative Report

Uniform ResidentialAppraisal

Report (URAR)Reconciliation

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NJ State Real Estate Appraiser Licensure/Certification

NJ trainee appraiserNJ state-licensed residential appraiserNJ certified residential real estate appraiserNJ certified general appraiser

A trainee appraiser requires 75 hours of qualifying education