Real Property

1
Real Property Its Appraisal

• Jim Burton, Ph.D.
• Marketing Real Estate
• College of Business

2
Overview

• Attributes of Land
• Concepts of Land
• Appraisal Practice
• Types of Value
• Appraiser Liabilities
• Valuing Cash Flows
• Uses of Appraisals

3
Attributes of Land

• Each parcel is unique
• Land is physically immobile
• Land is durable
• Supply of land is finite
• Land is useful to people
• Land is one of the four agents of production

4
Concepts of Land

• Governmental Legal
• Economic
• Social
• Geographic Environmental
• Definitions
• Real Estate
• Real Property
• Personal Property

5
Appraisal Practice

• Buyers Sellers influence value
• Real Estate Agents Brokers
• Financial Institutions
• Licensed Certified Appraisers
• Three Appraisal Activities
• Appraisal
• Appraisal Consulting
• Appraisal Review
• Appraisal Formats

6
Types of Value

• Value PV of Future Benefits (Cash Flow)
• Market Value
• Most Probable Selling Price
• Investment Value
• Going-concern Value
• Assessed Value
• Use Value

7
Appraiser Liabilities

• Negligence
• Misrepresentation
• Fraud
• Breach of Contract
• Lack of Compliance with Sate or Federal Standards

8
Valuing Cash Flows

• PV of Equity
• PV of Mortgage Loan
• PV of NOI Reversion
• PV of all ATCF
• Selecting Discount Rate

9
Uses of Appraisals

• Transfer of Ownership
• Financing
• Litigation
• Tax Matters
• Investment Counseling
• Market Feasibility