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REAL PROPERTY DEFINITIONS

Southeast Appraisal
Southeast Appraisal 3350 Riverwood Parkway Suite 1900-19077 Atlanta, Georgia 30339 Phone: (770) 883-6987 Fax: (866) 839-7887
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It is quite important in the valuation of real property to consider the assumption of use, that is, continued use or as a general industrial / commercial use. For example, must an abandoned car dealership be considered only as a dealership, or is an assumption appropriate that an alternative use as a group of retail stores will reflect the highest and best use of the property. Per the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), Market Value is the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.  Implicit in this definition is consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: Buyer and seller are typically motivated; Both parties are well informed or well advised, and acting in what they consider their own best interests; A reasonable time is allowed for exposure in the open market; Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. Other real property value definitions, as published by the Appraisal Institute in The Dictionary of Real Estate Appraisal, are as follows: Use Value is the value of a property assuming a specific use, which may or may not be the property’s highest and best use on the effective date of the appraisal. Market Value of the Going Concern is the market value of an established and operating business including the real property, personal property, financial assets, and the intangible assets of the business.
© Southeast Appraisal Resource Associates, Inc. 2015
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REAL PROPERTY DEFINITIONS

Southeast Appraisal
It is quite important in the valuation of real property to consider the assumption of use, that is, continued use or as a general industrial / commercial use. For example, must an abandoned car dealership be considered only as a dealership, or is an assumption appropriate that an alternative use as a group of retail stores will reflect the highest and best use of the property. Per the Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA), Market Value is the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus.  Implicit in this definition is consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: Buyer and seller are typically motivated; Both parties are well informed or well advised, and acting in what they consider their own best interests; A reasonable time is allowed for exposure in the open market; Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. Other real property value definitions, as published by the Appraisal Institute in The Dictionary of Real Estate Appraisal, are as follows: Use Value is the value of a property assuming a specific use, which may or may not be the property’s highest and best use on the effective date of the appraisal. Market Value of the Going Concern is the market value of an established and operating business including the real property, personal property, financial assets, and the intangible assets of the business.