GLOSSARY

Main Menu

Home Order Appraisal About Us Why Choose Us? Areas of Coverage Appraisal Glossary Appraisal FAQs Services and Fees Our Technology Staff Documents Divorce Appraisals Estate Appraisals PMI Removal Expert Testimony For Sellers For Buyers For Homeowners Assessment Appeal Real Estate News Contact

Appraisal Glossary

A
ACRE: A land measure equal to 43,560 square feet.

AD VALOREM TAX: A real estate tax levied in proportion to the value of the property.

APPEALS PROCESS: State Code establishes procedures for appealing the valuation/classification of properties. Normally the sequence of events starts with an informal appeal to the Assessor, to the local Board of Equalization, the State Board of Tax Appeals and finally the court system.

APPRAISAL: An opinion of value based upon market conditions.

APPROACHES TO VALUE: Valuation methods used in the determination of property value. The three common approaches for real property are the cost approach, income approach and market (comparable sales) approach.

ARMS-LENGTH TRANSACTION: A sale between two unrelated parties seeking to maximize each of their positions from the transactions.

ASSESSMENT: The valuation of property for tax purposes.

ASSESSMENT ROLL OR "ROLL": A listing of all property and its assessed value.

ASSESSED VALUE: The property value determined by the County Assessor and used by the Treasurer to calculate a tax amount. The assessed value is essentially the value of the lot and the house, minus the Homeowner’s Exemption ($50,000 or 50% of the improvement value, whichever is less).

ASSESSMENT YEAR: In state, the lien date is January 1. The assessed value of the property is based on its market value as of the lien date.

ASSESSOR: The elected official whose legal responsibility it is to discover, list and value all property in his jurisdiction.


B
BOARD OF EQUALIZATION (BOE): A nonjudicial, appointed body (the county commission) which attempts to ensure that property under its jurisdiction is appraised equitably and at market value.


C
CAMA: Computer-Assisted Mass Appraisal is the process by which property is appraised utilizing computers, computer models and analytical programs.

CATEGORY/DESCRIPTION: Categories of property established by the State Tax Commission, for purposes of assessment, equalization and taxation.

COMPARABLES: A shortened term for similar property sales, rentals, or operating expenses used for comparison in the valuation process; also called "comps".

COST APPROACH: Estimates property value by determining replacement cost new, less depreciation, plus the land value.

CURABLE DEPRECIATION: Items of physical deterioration or functional obsolescence that are economically feasible to cure. Economic feasibility is indicated if the cost to cure is equal to or less than the anticipated increase in the value of the property.


D
DEPRECIATION: 1. In appraising, a loss in property value from any cause; the difference between the reproduction or replacement cost of an improvement on the effective date of the appraisal and the market value of the improvement on the same date; 2. In regard to improvements, depreciation encompasses both deterioration and obsolescence.

DETERIORATION: Impairment of condition; a cause of depreciation that reflects the loss in value due to wear and tear, disintegration, use in service, and the action of the elements.


E
EASEMENT: A limited right in a piece of land owned by another. This entitles the holder of the right to some use of the land. For instance, if Barney owns a property that is completely surrounded by Fred's property, Barney can get an easement to build a driveway from his property to the main road.

EGRESS: A way out; an exit or outlet.

EMINENT DOMAIN: The right of government to take private property for public use upon the payment of just compensation. The Fifth Amendment of the U.S. Constitution, also known as "the takings clause," guarantees payment of just compensation upon appropriation of private property.

EQUALIZATION: The process by which an appropriate governmental body attempts to ensure that all property under its jurisdiction is assessed equitably at market value or at a ratio or ratios as required by law.

ESCHEAT: The right of government that gives the state titular ownership of a property when its owner dies without a will or any ascertainable heirs.

ESTIMATED TAX: This amount is calculated by multiplying the assessed value by the prior year's levy.


F
FEE APPRAISER: An appraiser who is paid a fee for the appraisal assignments he or she performs. Generally not employed by the entity that orders the appraisal.

FLOODPLAIN: The flat surfaces along the courses of rivers, streams, and other bodies of water that are subject to overflow and flooding.

FORECLOSURE: The legal process in which a mortgagee forces the sale of a property to recover all or part of a loan on which the mortgagor has defaulted.


G
GRANTEE: A person to whom property is transferred by deed or to whom property rights are granted by a trust instrument or other document.

GRANTOR: A person who transfers property by deed or grants property rights through a trust instrument or other document.


H
HIGHEST AND BEST USE: The reasonable, probable, and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value. The four criteria the highest and best use must meet are: legal permissibility, physical possibility, financial feasibility, and maximum profitability.


I
IAAO: International Association of Assessing Officers.

IMPROVEMENTS: All buildings, structures, pools, fences, etc., fixed to the land. For example, a house built on a vacant lot is considered an improvement.

INCOME APPROACH: An appraisal method in which the property is valued according to its ability to produce income.

INCURABLE DEPRECIATION: An element of accrued depreciation; a defect caused by a deficiency or superadequacy in the structure, materials, or design, which cannot be practically or economically corrected.

INDUSTRIAL PROPERTY: Land and/or improvements that can be adapted for industrial use; a combination of land, improvements, and machinery integrated into a functioning unit to assemble, process, and manufacture products from raw materials or fabricated parts.

INGRESS: A means of entering; an entrance.

INSTRUMENT: In real estate, a formal, legal document, e.g., a contract, a deed, a lease, a will.


L
LEGAL DESCRIPTION: A statement in words or codes identifying land for all purposes of law.

LOT: 1. A distinct piece of land; a piece of land that forms a part of a district, community, city block, etc.; 2. A smaller portion into which a city block or subdivision is divided; described by reference to a recorded plat or by definite boundaries; a piece of land in one ownership, whether platted or unplatted.


M
MAPPING: The process of creating maps from recorded documents such as deeds and subdivision plats.

MARKET APPROACH: Estimates property value by comparison to similar properties that have sold in the open market.

MARKET VALUE: The most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed terms for which the specified property rights should sell after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self-interest, and assuming that neither is under undue duress.

MASS APPRAISAL: The process of valuing a universe of properties as of a given date utilizing standard methodology, employing common data, and allowing for statistical testing.

METES AND BOUNDS SYSTEM: A system for the legal description of land that refers to the parcel's boundaries, which are formed by the point of beginning (POB) and all intermediate points (bounds) and the courses or angular direction of each point (metes).


O
OBSOLESCENCE: One cause of depreciation; an impairment of desirability and usefulness caused by new inventions, changes in design, improved processes for production, or other external factors that make a property less desirable and valuable for a continued use; may be either functional or external.

OWNER OF RECORD: The owner of title to a property as indicated by public records.


P
PARCEL: A piece of land of any size in one ownership.

PARCEL NUMBER: A code number that serves as an abbreviation of, or replacement for, a parcel's legal description; used to facilitate the storage and use of land data in an information system; may be based on geocodes, government surveys, or tax maps.

PERSONAL PROPERTY: Identifiable portable and tangible objects that are considered by the general public to be "personal", e.g., furnishings, artwork, antiques, gems and jewelry, collectibles, machinery and equipment; all property that is not classified as real estate. Personal property includes movable items that are not permanently affixed to, and part of, the real estate.

PLAT: 1. A plan, map, or chart of a city, town, section, or subdivision indicating the location and boundaries of individual properties; 2. A map or sketch of an individual property that shows property lines and may include features such as soils, building locations, vegetation, and topography.


Q
QUITCLAIM DEED: A form of conveyance in which any interest the grantor possesses in the property described in the deed is conveyed to the grantee without warranty of title.


R
REAPPRAISAL: The mass appraisal of all property within an assessment jurisdiction normally accomplished within a given time period. Also called revaluation or reassessment. In state, 100% of all properties are reassessed every five years.

REAL PROPERTY: Land and improvements to the land.


T
TAX CODE: Indicates which taxing entities will receive revenues generated from property taxes levied against this property.

TAX EXEMPTIONS: Those qualified individuals, as stipulated in state State Code, entitled to an exemption of a specified amount of Assessed Value. Those who are blind, disabled, widows or widowers and disabled veterans may be eligible.

TAX ROLL: A listing of real property parcels. This file includes information about parcel ownership and mailing address, property location, land use and valuation.

TAX BASE: Total assessed value in a given tax district.

TAXABLE VALUE: Taxable value is the value of property as determined by the Assessor using methods proscribed by state Statute and State Tax Commission rules. Generally speaking, taxable value of real property is the appraised value of the land and the current replacement cost of improvements less statutory depreciation.

TAX EXEMPT PARCELS: state law exempts all property owned by federal, state and local governments from taxation. This includes property for schools, parks, libraries, government buildings, roads, airports, military installations and other public areas. The law also exempts churches and some other charitable organizations.

TITLE: All of the elements that constitute the legal right to own, possess, use control, enjoy and dispose of real estate.

TITLE COMPANY: The entity that ensures the title for the owner of the property.


U
UNIFORM STANDARDS OF PROFESSIONAL APPRAISAL PRACTICE (USPAP): Current standards of the appraisal profession, developed for appraisers and the users of appraisal services by the Appraisal Standards Board of The Appraisal Foundation. The Uniform Standards set forth the procedures to be followed in developing an appraisal, analysis, or opinion and the manner in which an appraisal, analysis, or opinion is communicated. They are endorsed by the Appraisal Institute and by other professional appraisal organizations.

UNSECURED PROPERTY: Taxable property which does not attach to the real estate, such as business equipment and fixtures, mobile/manufactured homes and airplanes.


V
VALUATION: The process of estimating the market value, insurable value, investment value, or some other properly defined value of an identified interest or interests in a specific parcel or parcels of real estate as of a given date. Valuation is a term used interchangeably with appraisal.

VALUE: 1. The monetary worth of a property, good, or service to buyers and sellers at a given time; 2. The present worth of the future benefits that accrue to real property ownership.

Sources: state State Tax Commission, International Association of Assessing Officers