- Market Value
- The most probable price a property should bring in a competitive and open market under conditions where buyer and seller each act prudently and without undue pressure.
- Appraisal
- An unbiased professional opinion of the value of real property, developed by a qualified appraiser as of a specific date.
- USPAP (Uniform Standards of Professional Appraisal Practice)
- The generally recognized ethical and performance standards that govern the appraisal profession in the United States, which appraisers must follow when developing and reporting an appraisal.
- Highest and Best Use
- The reasonably probable and legal use of a property that is physically possible, appropriately supported, financially feasible, and results in the highest value.
- Sales Comparison Approach
- A valuation method that estimates a property's value by comparing it to similar recently sold properties and adjusting for differences between them.
- Cost Approach
- A valuation method that estimates value as the cost to replace or reproduce the improvements, minus depreciation, plus the value of the land.
- Income Approach
- A valuation method that estimates value based on the income a property is expected to generate, typically by capitalizing net operating income.
- Depreciation
- A loss in value of improvements from any cause, including physical deterioration, functional obsolescence, and external obsolescence.
- Capitalization Rate (Cap Rate)
- The ratio of a property's net operating income to its value or purchase price, used to convert income into an estimate of value.
- Gross Living Area (GLA)
- The total finished, above-grade living space of a residence, measured to the exterior of the walls and used as a key basis for comparison.
- Effective Age
- An appraiser's estimate of a property's apparent age based on its condition and utility, which may differ from its actual chronological age.
- Reconciliation
- The final step in the appraisal process where the appraiser weighs the value indications from the different approaches to arrive at a single final opinion of value.