| To be able to fully understand the
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| | buyer wants to purchase a property. He
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| concepts of residential real estate
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| | estimates the future cash flow that the
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| appraisal, here is a list of important
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| | property would generate. Then, he
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| terms with meaning. Appraisal becomes
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| | discounts the cash flow into a lump sum
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| important in times of selling the
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| | value amount. Let us say $450,000. If the
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| property, buying a property, divorcing
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| | home owner sells less than $450,000, the
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| the partner, settling the estate, and
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| | home buyer considers in purchasing the
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| relocating an employee. In some point of
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| | property.
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| our lifetime, we are going to encounter
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| | Investment Value
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| appraisals at least once.
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| | It is the amount that the investor would
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| Fair Market Value
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| | pay to acquire the property. The
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| It is the median price between the
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| | Investment Value may be higher or lower
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| highest price acceptable to buyer and
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| | than the fair Market value.
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| lowest price acceptable to seller.
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| | Insurable Value
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| Market Value
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| | The Insurance Policy covers the value of
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| It is the most likely price at which the
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| | the property which is the Insurable
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| property would sell. The property must
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| | Value.
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| sell at a right price in which the price
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| | Subject Property
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| is not too high and low. Thus, an
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| | It is the property which the appraiser
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| overprice property will sell a little
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| | evaluates or analyzes. The Appraiser
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| longer. In most cases, an overprice
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| | analyzes the location, amenities, and
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| property sells when the market value
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| | condition of the subject property to
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| catch up with the selling price.
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| | arrive to the fair market value.
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| Price
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| | Comparables or Comps
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| It is often confuse with Market Value.
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| | Appraiser compares the subject property
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| Price differs slightly from Market Value.
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| | to another local property. The other
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| Although the Market Value gives the
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| | local property is called Comparables or
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| seller an idea how much to sell the
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| | Comps. With the information from
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| property, the price may be higher or
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| | Comparables or Comps, the Appraiser
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| lower than the Market Value. For example,
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| | calculates the fair market value of the
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| a buyer is willing to pay $20,000 more
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| | subject property.
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| than the Market Value. This happens when
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| | Real Estate Appraisal covers a huge
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| there are many potential buyers for the
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| | scope. It is impossible to include all
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| property.
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| | appraisal terms. For any missing key
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| Value in Use
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| | terms, you may consider online mortgage
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| This relates to the net present value
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| | dictionary. A dictionary awaits your
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| (NPV) of the property use. The NPV is the
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| | command. In an instant, it searches for
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| difference between present value of cash
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| | possible definition.
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| inflow and outflow. For example, a home
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