Match: Valuation and Market Analysis
Terms for this Game
Principle of progression is a principle of real estate and the appraisal industry that states that the value of a lower-end property can be increased or positively affected by other higher-end property in the same neighborhood or locality.
The law of supply and demand dictates the equilibrium price of a property. A low supply or housing inventory may drive prices up, which is what tends to result in bidding wars. A specific property may be in demand by multiple parties who all try to outbid each other by increasing their purchase price offe
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.
Plottage is the increase in value realized by combining adjacent parcels of land into one larger parcel
The cost approach is a real estate valuation method that estimates the price a buyer should pay for a piece of property is equal the cost to build an equivalent building. In the cost approach, the property’s value is equal to the cost of land, plus total costs of construction, less depreciation.
An appraisal is the estimation of a home’s current market value. A licensed appraiser completes this estimation, which is calculated by comparing the recent sales of homes in the area as to the property that is being appraised.
Cost recovery refers to the deduction of a portion of the cost of an asset, used in a business or for the production of income, over its useful life through depreciation, amortization, or depletion.
A comparative market analysis (CMA) is an estimate of a home’s value based on recently sold, similar properties in the immediate area. Real estate agents and brokers create CMA reports to help sellers set listing prices for their homes and, less commonly, to help buyers make competitive offers.
The term appraiser refers to a professional who determines the market value of an asset, notably in the real estate industry. An appraiser is expected to act independently of the buying and selling parties in a transaction. Their opinion about the real and fair value of an appraised asset must be unbiased by using observations as well as relevant statistics, facts, and other information. Depending on the circumstances, the appraiser presents their findings in a written or verbal appraisal.