What is a Plottage value in real estate?
Plottage is the increase in value realized by combining adjacent parcels of land into one larger parcel. The process of combining the parcels is known as assemblage. Generally, the value of the whole parcel will be greater than the sum of the individual smaller parcels.
What is substitution in real estate?
A principle of substitution states that a buyer will pay no more for a property than the cost of an equally desirable (and comparable) alternative property.
What does the principle of substitution say?
The principle of substitution states that the upper limit of value tends to be set by the cost of acquiring an equally desirable substitute, assuming no untimely delays. A prudent investor would pay no more for an income-producing property than it would cost to build or purchase a similar property.
Does real estate fall under finance?
One oft-overlooked career area in finance is real estate finance. However, because of recent changes to federal law regarding mortgages and borrowing, including the Home Affordable Refinance Program (HARP), mortgages and real estate have become very popular topics in the financial world.
What is substitution in appraisal?
The Principle of Substitution is the basis for the market data approach to appraisal. This principle says that the maximum value of a property usually is established by the cost of acquiring an equivalent substitute property that has the same use, design, and income.
Which appraisal approach depends on the principle of substitution?
Sales Comparison (Market) Approach Like the cost approach, the sales comparison approach is based on the principle of substitution. This principle presumes that a prudent buyer will pay no more for a property than the purchase price of a similar and equally desirable property.
What is the first step in completing a CMA?
What are the four steps in the CMA process? Collect and analyze information about the seller’s property. Choose comparable properties in the area. Compare the seller’s property to the comparables and do some adjusting to the value of the comparables.
What is the difference between the appraised value of a property and its mortgage value if any?
What is the difference between the appraised value of a property and its mortgage value, if any? The appraised value is an appraiser’s estimate; mortgage value is the value a lender imputes to the property as collateral. requires the fewest and smallest adjustments. the state in which the appraiser operates.
Should you ever pay more than appraised value for a home?
If you do pay more than the appraisal, you’ll spend more than the house is worth. If you wouldn’t pay more than the list price for a car or even for shoes, you generally shouldn’t do so for a house. Unless cash buyers are ready to swoop in, you can use the low appraisal as an opportunity to renegotiate.
Do sellers usually lower price after appraisal?
When you’re buying real estate, the best thing that can happen when the appraisal is low is for the seller to lower the price. However, sellers and their real estate agents usually have a good idea of what the property is really worth.
How often do houses not appraise for asking price?
Low home appraisals do not occur often. Fannie Mae says that appraisals come in low less than 8 percent of the time and many of these low appraisals are renegotiated higher after an appeal, Graham says.
Can seller sue buyer for backing out?
A home seller who backs out of a purchase contract can be sued for breach of contract. “The buyer could sue for damages, but usually, they sue for the property,” Schorr says. A seller often has to pay the buyer’s legal fees, as well as his own, says Schorr. “That could be a harsh penalty.”
What happens during final walk through?
During the walkthrough, a buyer and their real estate agent will go through the property. They’ll check that there’s no new damage, that all the home’s systems and appliances included in the sale are still working and that the home is clean condition.
Do you give Realtor a gift at closing?
You’re not required to give your realtor a gift after closing. In fact, realtors and other real estate agents rarely get gifts at closing. Many realtors are pleasantly surprised when a client sends them a gift after closing because it’s not expected; however, it’s greatly appreciated.
How long does final walk-through take?
Depending on the size of the home, a final walk-through can take anywhere from 15 minutes for a small home to more than an hour for a larger property. Build in extra time to inspect extra items, such as a pool or a detached shed or garage.
Can a seller refuse a final walk-through?
No, not by terms of standard real estate contracts. Of course a seller could refuse but there would be ramifications. Violation could allow buyer to withdraw and or sue for damages or even specific performance. A buyer should never waive final walkthrough.
Should House be empty for final walk-through?
Home sellers should always empty the home completely unless there is an agreement in place, otherwise it could create a problem at the final walk-through.
Can you leave stuff behind when you sell your house?
When selling, it’s important not to burden the new owners by leaving behind items they didn’t ask for. Some items, like manuals, warranties and spare parts, can be left behind as a convenience to the new owners. When in doubt about what to leave behind, consult your REALTOR® who can provide an expert opinion.
Does seller have to clean house?
Items Left by Seller – Any personal property left behind by the seller becomes property of the buyer. Seller shall clean the interior and remove all trash, debris and rubbish prior to the buyer taking possession.