What is conformity in real estate? Conformity refers to the similarity of properties within a neighborhood in terms of prevailing age, condition, size, style, and functional utility.
What is the principle of progression in real estate? Principle of progression is the idea that the value of a house increases when more valuable houses are built in the area. This contrasts with principle of regression, which is based on the concept that larger, more expensive houses lose value when they are near smaller, less valuable homes.
What is substitution in real estate? The Principle of Substitution is the basis for the market data approach to appraisal. This principle says that the maximum value of a property usually is established by the cost of acquiring an equivalent substitute property that has the same use, design, and income.
What does Plottage mean in real estate? Plottage is the increase in value realized by combining adjacent parcels of land into one larger parcel. Generally, the value of the whole parcel will be greater than the sum of the individual smaller parcels.
What is conformity in real estate? – Related Questions
What is highest and best use in real estate?
Highest and Best Use, Defined
What does regression mean in real estate?
The principle of regression is a term used by real estate appraisers stating that the value of high-end real estate may be diminished by having lower-end properties in the same vicinity.
This principle is used frequently in writing zoning laws, which strive to keep business and residential areas separate.
What does functional obsolescence mean in real estate?
loss of property value
What Is Functional Obsolescence
What is economic obsolescence in real estate?
Economic obsolescence (EO) is the loss of value resulting from external economic factors to an asset or group of assets.
EO is often encountered in valuation work performed for financial reporting purposes, bankruptcy emergence and in other practice areas when dealing with companies in capital-intensive industries.
What is another word for Plottage real estate?
What is another word for plottage
What is the difference between excess and surplus land?
Excess Land: This is when the lot is larger in size and the extra land (or excess) can be sold separately from the existing lot. Surplus Land: This is when the lot is larger in size and the extra land (or surplus) cannot be sold off separately. This means the “surplus” doesn’t have a separate highest and best use.
What is situs in real estate?
Situs is a term used by the assessor’s office to indicate the site location of the property. This address is the actual address of the property. Billing address is not necessarily the same as situs address.
What is the best way to use land?
A property must be appraised in terms of its highest and best use. The definition of highest and best use is as follows: The reasonable, probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value.
What is the smallest lot you can build on?
The zoning regulations require that for a house, the minimum square footage must be 120 square feet and it’s minimum plot size needs to be 320 square feet. There are additional regulations required for tiny houses and traditional homes.
What is an example of highest and best use?
For example, assume that “House B” has a value as a house of $200,000, and a site value as a commercial lot of $250,000 with a cost to demolish the house and prepare the site at $25,000. The highest and best use of the site is to demolish the house and sell the site as a commercial lot.
What is physical deterioration in real estate?
Physical deterioration refers to the loss in value of a real estate property due to the physical wearing out of a building.
The wear and tear on a property can be caused by naturally-occurring elements such as water, wind, extreme temperatures, termites, or earthquakes.
What is regression and progression in real estate?
The principle of progression states that the value of less expensive properties will increase when more expensive properties come into the area. The principle of regression states that the value of a more expensive property will decrease when less expensive properties come into the area.
What is supply and demand in real estate?
Supply and demand refers to the relationship between the buyers and suppliers of a particular product. The housing market depends extensively on this dynamic, because generally speaking housing prices rise and fall in sync with supply and demand.
What does an over improved property suffer from?
Over-improvement refers to improvement on a land in excess of the need.
It is over in the sense that it does not make the best use of the property, or is excessive in comparison with the improvement of similar properties.
An over improvement lessen the market value of the property.
Is planned obsolescence?
Planned obsolescence means manufacturers deliberately designing products to fail prematurely or become out-of-date, often to sell another product or an upgrade – a practice that is barred in some countries.
What depreciation is incurable?
Incurable depreciation refers to items of depreciation that either are physically impossible to cure or are too expensive to be worth curing. If the cost to fix the problem exceeds the loss in value caused by the problem, then it does not make economic sense to repair it.
What is an example of economic obsolescence?
Quick Summary. Economic obsolescence refers to the loss of value of a real estate property due to factors that are external to the property. Common causes of economic obsolescence include a change in aircraft flight patterns, increased crime rates, construction of a busy highway, construction of a landfill nearby, etc.
