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Appraisal Glossary Abstraction: A means of determining value by using comparable properties in similar markets. Accretion: A natural buildup of soil due to the action of a bordering body of water such as a river. Acre: 43,560 square feet. Actual Age: The real aging of a building. Addendum: An addition or change to a document that alters the original document. Adjusted Basis: The original cost of a property plus improvements minus depreciation. Adverse Possession: A claim made against land by another person based on open, notorious and hostile possession and use of the land without the consent of the owner. Affirmation: A declaration confirming that a statement of fact is accurate. Amenity: A feature that increases the value of a property or raw land because of location or some other pleasing or valuable attribute. Annual Percentage Rate: The rate of annual interest charged on a loan. Appraisal: An estimate of value. Often a report will be issued documenting supporting evidence using recent sales of comparable properties Appraisal Report: Generally the Uniform Residential Appraisal Report form 1004, and supporting documentation necessary to support the estimated value of a property Appraised Value: The estimated value of a property using accepted appraisal principals. Independent Appraisal: An estimate by an appraiser with no vested interest in determining value. Mass Appraisal: An evaluation of a group of employing common data in a specific time frame. Appraiser: A trained certified professional with extensive knowledge of real estate markets using generally accepted appraisal procedures to derive estimated value. Assessment: Establishing a value for the purpose of levying taxes. Assessment Roll: A list of taxable properties that is used to establish the tax base. Attached Housing: Property which is physically attached to another property and often sharing a common wall, such as town houses. Blighted Area: An area that has become undesirable. Book Value: It is cost basis in the property plus any improvements and minus all depreciation. Book Sale: A sale of property to the state when property taxes are owed by the owner. This is a change of title and a sale in name only. Buffer Zone: A small area which acts as a shield to keep one area separated from another, often used to separate residential from commercial areas. Building Restriction Line: A distance from the road within which no building may take place, generally defined by building or zoning codes. Built-Ins: Personal property which is installed and become a fixture. Buy Down: Use a larger down payments to lower the cost of borrowing. Cape Cod Colonial: A single story house style with a steep roof with gables. Capital improvement: Any permanent addition that adds to the value of a house or raw land Caveat Emptor: Let the buyer beware. It is the buyer’s responsibility to review and determine real value. Certificate of Occupancy: A document signifying code compliance and is safe. Certificate of Reasonable Value: It establishes the maximum amount which can be secured by a VA mortgage. Certificate of Title: A document designating the legal owner of a parcel of real estate. Clear Title: Ownership of property that is not encumbered or in doubt as to clear ownership Chain of Title: The chronological history of the ownership of a piece of property. Common Assessments: Fees charged to owners to cover the costs of maintaining shared or common areas. Common Areas: Such as hallways basements washer dryer rooms etc, commonly found in apartment buildings and condominiums and shared by all tenants. Community Property: Property acquired by a married couple. Comparables: Properties which are similar and are used as comparisons by appraisers and real estate agents to estimate a fair market value. Condominium: A form of ownership whereby individual units are owned, but the land, common areas and amenities are shared. Often the developer will own everything but the interior of a unit. Condominium Conversion: When a rental property such as an apartment complex converts from another form of ownership to a condominium Contiguous: A common boundary seamless and uninterrupted at any point. Corner Lot: A property at the intersection of two streets or by-ways. Covenants, Conditions and Restrictions: A legal document that defines the uses and the restrictions placed on a property. Often used in condominium properties. Craftsmen House: An architectural style that typically has a low pitched roof with an eave overhang with exposed rafters. Cul-De-Sac: A street with only one way in or out. Curb Appeal: A property's visual or aesthetic look that adds to value. Date of Appraisal: The date appraiser’s inspection date. Deed: A legal document proving ownership of a real property. Depreciation: A loss of value for any reason. Distressed Property: A property in foreclosure. Duplex: A single-building with two units, one above and one below. Economic Depreciation: a loss of property value not associated with the property but due to some external reason(s), such as neighborhood blight or new construction which changes the character of an area. Economic Life: The period in which income-producing property provides economic benefit to the owners or managers. Neighborhood Life-Cycle: The changes in a neighborhood due to changing demographics or economic changes due to construction or neglect. Economic Rent: What a leased property might rent for under current market conditions. Effective Age: The subjective age of a building rather than the actual age. An un-cared for property's effective age can be greater than its actual age. Encroachment: A building or permanent improvements placed on another’s property without permission. Encumbrance: A mortgage, liens or other claim. Equity: Fair market value of a property less any unpaid debt on the property. Erosion: The gradual wearing away of land due to natural forces. Escrow: Funds placed with a third party in a trust. This neutral party is often asked to carry out the instructions of both parties to a sale. Escrow Holder (Agent): A third party bound to carry out the instructions of the escrow agreement. Escrow Instructions: Written instructions both parties have agreed to carry out to complete a real estate transaction. Escrow Disbursements: The distribution of funds held in escrow, which are released after all parties have fulfilled the stipulations of the agreement. These funds are used to pay insurance premiums, taxes and all other accrued debts and agreed upon costs. Façade: A false architectural front of a building Fair Market Value: The sales price which a buyer and a seller acting in self interest are willing to transact a real estate deal. Feasibility Study: a analysis of the cost-benefit relationship of a project Final Value Estimate: An appraised market value derived at by the appraisal process. Fixture: Personal property which becomes permanently affixed to real property. Frontage: The part of a property that that borders a street or some access area. Functional Obsolescence: A loss of value when a property lacks a feature now commonly desirable or when neighborhood deterioration or new construction changes the character of the area, such a highway or shopping mall. Gable Roof: A triangular roof. Gambrel Roof: A barn-like roof. They are less angular than Gable roofs. General Appraiser: A professional who can appraise all types of property. Residential Appraiser: An appraiser who can only appraise residential property up to four units. Georgian: A classic, English-style house. Grade: The slope or angle of land near a property. Gross Living Area: Derived by measuring the outer walls, includes the entire exterior of a building. Height Zoning: The maximum height allowed for any building in a specific area Highest and Best Use: The best use of a property that results in the greatest increase of value. Using a property to its maximum potential. Home Inspection: The examination of the condition of a home. The inspection is designed to uncover damages and other hidden costs in the Roof, the Basement, the furnace, the water heater, and the air-conditioning systems. Hypothetical Condition: A condition which is assumed to exist for the for the purpose of analysis. Improved Land: Development of the land that increases its value or maximizes use. Income Approach: An estimation of value based on the cash flow, generally rents or other income streams that the property generates. Income Property: A property that has a stream of income, generally from rental units or commercial space including billboards and parking lots. Intended Use: The implied use of an appraiser’s conclusions issued in the report of estimated value of a specific property, as agreed upon with the client. Interior Lot: A lot with street frontage and generally surrounded by other lots. Investment Property: Property that is expected to generate a financial return. Joint Tenancy: The parties who own property jointly are referred to as co-tenants or joint tenants. There are three types: Tenancy in common: Each owner of the property have separate and distinct shares of ownership which can differ in size or shape from other owners shares. Joint tenancy with right of survivorship: When one owner dies, that owner's interest in the property automatically passes to the surviving owner(s). The property cannot be inherited by his heirs as it passes by contract and bypasses the will. Tenancy by the entirety: Husband and wife are considered a single legal person. Key Lot: A less desirable plot of land defined as a lot that is surrounded by other lots with an access way, resembling a key and lock. Land Projects: Subdivisions mad up of 50 or more parcels located in more in rural areas. Latent Defects: A hidden defect(s) in a piece of property that have not yet showed themselves. Generally, structural damage such as plumbing or soil conditions. Lien: A claim against property resulting from a debt or encumbrance Littoral: A parcel of land that borders a lake or the sea but not a stream or river. Metes and Bounds: A traditional system using geography and distances to measure and describe the boundaries of a parcel of land. Mineral Rights: The ownership and right to mine or use any minerals located underground. Multi-Family Housing: Housing built for more than four families. National Society of Real Estate Appraisers: Founded in 1956 to encourage the development and practice of professionalism of the appraisal industry. New England Colonial: A classic style of two stories with a door in the direct center of the building. The colonial house is square with symmetrical windows and a chimney in the center of the structure. Non-Conforming Use: It is the use of land or property for purposes other than its original intentions. Permission for use is given by zoning commissions or planning boards. Obsolescence: A loss in the utility of a property due to improved or superior equipment, design or other amenities resulting in a loss of value for the property. Occupancy Rate: The percentage of units or commercial properties leased a comparable area. Off-Site Improvements: Amenities or other properties located near a subject property that contribute to the subject property and therefore add value. On- Site Improvements: Amenities or other building located on a piece of property that adds value, such as a parking lot. Plat: A map showing the division of piece of land with lots, streets and common area. Prefabricated: Any structure manufactured off site and then erected on a property. Puffing: The use of exaggerated opinions that may cause of misrepresentation of the facts. Ranch House: A classic style popular in the West, typically a rectangular, one-story house with a low-pitched roof. Residential Property: 80% or better of the gross rental income comes from housing units. Riparian Rights: The rights of an owner of land adjacent to water. See Littoral Rights Sales Comparison Approach: An appraisal estimate derived by estimating the value of a property by comparison it to similar properties which have sold recently. Sandwich Lease: A lease created by a tenant when subletting to another person. Scarcity: When goods or services are desirable and in low supply people will bid up price. It is a function of the tension between supply and demand. Semi-detached Housing: Two residences which are attached on one side and share a common wall. Set-Back: The distance between buildings and the property line. Subdivision: A development of individual properties enveloped from one large parcel of land that ha been divided into smaller lots. Subject Property: A specific property that is the focus of an appraisal. Survey: The act of creating a specific property map describing measurements and legal boundaries including any improvements of a parcel of land. T-Intersection Lot: A lot that is directly facing onto a street Tax-Exempt Property: Property which is not taxed. Title: A legal document which is proof of ownership. Title Company: Companies that research the title chain to determine clear ownership. Title Insurance: A policy insuring a property owner after the purchase has been completed against defect due claims of prior ownership, liens or encumbrances. Title Search: A Title company will research title history and ensure that no outstanding claims exist. Tudor: A style of architecture typically steeply pitched gables and roof, stained glass windows and the half timber half stucco facades. Under improved Land: Land not improved to the full extent of its economic potential. Uniform Standards of Professional Appraisal Practice: USPAP establishes the standards to which the appraisal industry conforms. Useful Life: The period time that a property can provide economic benefit to it owners. Utility Value: The usefulness of a property to an owner. Walk-Through: An on-sight appraisal of a property by actually walking through the entire property to catalogue its entirety. Warranty: An affidavit given to stipulate the condition of a property. Wear and Tear: Normal damage to a property through every-day use.
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