About This Chapter
Property Valuation & Appraisal - Chapter Summary
Understanding the process and criteria for valuating properties is a critical skill for real estate professionals. The lessons throughout this chapter will explain the criteria, processes, and factors involved in real estate appraisals and determining market value. You'll explore topics including:
- Property valuation and appraisals
- Influence of location, market, and site when calculating value
- Understanding and using comps
- Cost, income, and income capitalization approaches
- Interpreting appraisals and inspection reports
- Understanding construction terminology
Valuating properties can be complex, but our expert instructors present the topics in short, engaging video and text lessons so you can review the materials quickly and remember them longer. Reference the written transcripts as you study or as a means of review throughout the chapter. You'll also find key terms in bold for quick reference. If anything seems unclear as you progress through the chapter, send a message to one of our subject experts. Once you feel you have mastered the material, take the short self-assessment quiz found in each lesson. The quizzes are a great way to confirm your understanding or provide an added review mechanism. Want to track your progress through the chapter? Just pull up your Dashboard and take a look.
1. Property Valuation: Definition & Principles
Valuing property accurately is very important to sellers, home purchasers, lenders, and real estate investors. In this lesson, you'll learn about property valuation and some of its key principles.
2. Property Appraisal: Definition, Purpose & Process
Let's take a look at property appraisal and broad explanations of different approaches. We'll discuss how these approaches work and what purposes they serve, and help understand how they tie into the final reconciliation of value.
3. Property Depreciation: Definition, Importance & Types
This lesson defines depreciation as it applies to real estate property valuation. We will cover the different types of obsolescence that are factors in depreciation.
4. Area-Regional & Neighborhood Analysis in Property Appraisal
In this lesson, you will learn how to interpret the area-regional and neighborhood analysis section in a property appraisal report. Many factors and considerations determine if the current use of the property is the highest and best available.
5. Market Data Analysis in Property Appraisal: Definition & Factors
Comparative Market Analysis (CMA) is a method for pricing a real estate property that is for sale. Factors that are important in CMA include market area delineation, demand analysis, supply analysis, absorption analysis, vacancy analysis, and market rental analysis.
6. Site Analysis in Property Appraisal: Definition & Factors
Correctly valuing real estate is very important because of the money at stake, even for a relatively small purchase. In this lesson, you'll learn about site analysis and some of the key components involved with it.
7. Cost Approach to Property Valuation: Definition & Process
In this lesson, we will learn about the cost approach to valuation, a widely-used method for determining market value of real property. We will explore some of the benefits and limitations of this method. Test your knowledge afterward with a quiz.
8. The Sales Comparison Approach to Property Valuation
Residential real estate listing prices are often determined using the comparative sales approach. In this lesson, we will define and describe that method.
9. The Income Approach to Property Valuation
The income approach to property valuation is a useful tool for investors to evaluate income producing real estate. We will discuss the three major formulas that comprise the approach.
10. The Income Capitalization Approach for Appraisals
Every real estate investor needs to know the potential investment returns of a property before buying. The income capitalization approach to appraisals helps investors figure out a maximum purchase price for a particular rental property.
11. How to Interpret an Appraisal Report
In this lesson, you will learn how to interpret a uniform residential appraisal report. You will see where an appraiser assigns a value to the home, the approaches that the appraiser used to reach that value, and the key areas to focus on when you review the report.
12. Property Inspection: Role, Importance & Process
Smart buyers require a professional property inspection when purchasing real estate, with satisfactory results as a contingency for the sale to close. In this lesson, you'll learn about the role of property inspections, the process of executing them, and their importance.
13. Construction Terms Used in Property Appraisals & Inspections
Appraisal and inspection reports often include construction and building terms to describe improvement of a property. Real estate professionals needs to have a basic familiarity with common terms to understand these reports.
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Other chapters within the Real Estate Exam Prep course
- Forms of Property Ownership
- Encumbrances in Real Estate
- Land Use & Regulations
- Land Descriptions & Surveys
- Transfer of Real Property
- Fair Housing & Consumer Protection
- Contracts In Real Estate Transactions
- Role of Agencies in Real Estate
- Real Estate Investment & Analysis
- Disclosures of Property Conditions
- Real Estate Financing
- Real Estate Closing & Settlement Procedures
- Leases & Property Management
- Principles of Practicing Real Estate
- Real Estate Ethics & Professional Responsibility
- Real Estate Exam Prep Flashcards