Appraisal

1. An opinion or estimate of value. 
2. The act or process of estimating value or conducting an evaluation study. Whether written or oral it should set forth the opinions or conclusions of the appraiser concerning the property as of a specific date, supported by the presentation and analysis of relevant data.

Appraisal Methods

The valuation approaches used in the appraisal of real property (cost, direct sales comparison and income).

Appraisal Process

A systematic analysis of the factors that bear upon the value of real estate. An orderly program by which the problem defined, the work necessary to solve the problem is planned, and the data involved are acquired, classified, analyzed, and interpreted into a final opinion or conclusion.

Appraised Value

An opinion of an appraiser which is based upon an interpretation of facts and judgments and their processing into an estimate of value, as of a stated date. For our purpose we are seeking market value, as defined by the Property Tax Code, Section 1.04(7).

Computer Assisted Mass Appraisal (CAMA)

The application of computer technology and statistical techniques to the solution of appraisal problems. In property tax administration, CAMA programs are used to produce cost and market estimates of market value and appraisal/sale price ratio analysis.

Cost Approach

Is based on the proposition that the informed purchaser would pay no more than the cost of producing a substitute property with the same utility as the subject. Is most applicable when the subject property involves relatively new improvements which represent the highest and best use of the land or specialized improvements are located on the site, for which there exist no comparable properties.

Depreciation

A loss of utility and hence value from any cause.

Direct Sales Comparison Approach

Is based on the proposition that an informed purchaser would pay no more for a property than the cost of acquiring an existing property with the same utility. This approach is applicable when an active market provides sufficient quantities of reliable data which can be verified from authoritative sources.

Discovery

(1) The process whereby the assessor (appraiser) identifies all taxable property in a jurisdiction and ensures that it is included on the assessment (appraisal) roll.

Final Value Estimate

The appraiser’s opinion or conclusion resulting from the application of appraisal analysis, including reconciliation of finding to the appraisal problem at hand.

Income Approach

That procedure in appraisal analysis which converts anticipated benefits (dollar income or amenities) to be derived from the ownership of property into a value estimate. The income approach is widely applied in appraising income-producing properties. Anticipated future income and/or reversions are discounted to a present worth figure through the capitalization process.

Location

An economic characteristic of Real Estate composed of immobility, constant change, dependence, and elements of special distribution. Location is an economic, even though a location can be described in physical and legal terms.

Market Value

The price at which a property would transfer for cash or its equivalent under prevailing market conditions if:

1. exposed for sale in the open market with a reasonable time for the seller to find a purchaser;
2. both the seller and the purchaser know of all the uses and purposes to which the property is adapted and for which it is capable of being used and of the enforceable restrictions on its use; and
3. both the seller and purchaser seek to maximize their gains and neither is in a position to take advantage of the exigencies of the other.

Neighborhood

A portion of a larger community in which there is a homogenous grouping of inhabitants, building or business enterprises.

Neighborhood Analysis

The objective analysis of observable and/or quantifiable data indicating discernible patterns of urban growth, structure, and change that may detract from or enhance property values.

Observed Condition

The condition of a property ascertained by a detailed inspection. Physical condition.

Sales – Market Ratio

The ratio derived by the selling price by the market value.

Sales – Ratio Analysis

Study of the relationship between market value, sales prices and the deviations resulting from differences between the two. The purpose of such an analysis is to determine the efficiency and fairness of assessing activities of a particular jurisdiction.

Tax Rate

The rate to be applied to the taxable value to determine the amount of tax due. The rate is expressed in dollars per $100 of taxable value.

Taxable Value

The taxable value is calculated by subtracting all applicable exemptions from the appraised value of a property. The taxable value is multiplied by the tax rate to determine the tax levy.

Uniformity

Denotes assessed values which have the same relationship to market value. Implies the equalization of the tax burden.