Champions Principles of Real Estate 2 Latest Version Graded A+

Champions Principles of Real Estate 2 Latest Version Graded A+ appraisal value of a property maybe affected by social, economic, govt and environmental influences Loan-to-Value Ratio (LTV) The percentage of value or sales price that a lender is willing to finance. limited appraisal report exterior only/drive by inspection. deemed as low risk loan highest and best use of property legal use that gives the greatest return Principal of Contribution cost does not equal value Residential Mortgage Loan Originators (RMLO) Must be certified licence holders and is mandated by the SAFE ACT (TX dept of savings and mortgage lending) Principle of Anticipation purchase price is affected by the expectation of future appeal and benefits Principal of Substitution value of a commodity is influenced by the cost of acquiring subsitute or comparable item Principal of progression value of properties around yours goes up; so does yours Principal of Regression The Value of more expensive home placed in a neighborhood of less expensive homes will drop in value Market Value the most probable price a property should bring in a competitive and open market under fair conditions requisit to a fair sale. appraisal process The value of a property may be affected by social, economic, governmental and environmental influences. An appraiser must always be aware of these influences and possible changes in them that could affect market value. Three approaches to value (1) The Sales Comparison Approach (2) The Cost Approach, (3) The Income Approach. Sales Comparison Approach A value for existing properties method for comparing similar properties to the subject property. this is the best indicator. Market Data Approach aka: sales comparison approach Physical Deterioration Loss of value of a building from its reproduction cost, resulting from wear and tear over time. Functional Obsolescence loss of desirability of the style, layout or function of an element of property over time External Obsolescence Losses of property value caused by forces or conditions beyond the borders of the property. ie. zoning, highways promissary note evidence of a lean. simply