A  B  C  D  E  F  G H   I  J  K  L  M

 N  O  P  Q  R  S  T  U V  W  X  Y  Z 


- A -

4-3-2-1 Rule - Rule that states that the first 25% of depth represents 40% of the value; the second 25%, 30% of the values; the third 25%, 20% of the value; and the final 25%, 10% of the value.

65/35 Rule - Rule states that the value of a triangular lot with its base on the facing street will be approximately 65% of that of a rectangular lot of the same frontage and depth. The value of the triangular lot with its apex on the facing street will be 35% of that of a rectangular lot of the same frontage and depth.

Abstraction Method - Method of land valuation whereby improvement values obtained from the cost model are subtracted from sales prices of improved parcels to yield residual land value estimates.

Accessory building - A building subordinate to and used in conjunction with a principal or main building. Accessory buildings include barns, cribs, sheds, and private garages.

Ad Valorem Tax - Tax levied based on the value of an item. The property tax is an ad valorem tax.

Adaptive Estimation Procedure (AEP) - A computerized procedure using properties of which sales prices are known to produce a model that can be used to value properties for which sales prices are not known. Also called feedback.

Adjusted Sale Price - The sale price adjusted, as necessary, for the effects of time, financing, and personal property.

Adjustments - Modifications in the reported value of a variable, such as sale price. These adjustments can be used to estimate market value in the sale comparison approach, for example, by adjustments for differences between comparable and subject properties.

Age/Life - A method of estimating accrued depreciation based on the age of the property and its economic life. Another term is straight line depreciation.

Allocation Method - Method of land valuation used in the absence of vacant land sales, by using a typical ratio of land to improvement value

Amortization Rate - The ratio of the periodic amortization payment to the total principal amount to be amortized; corresponds to a sinking fund factor or rate; the difference between the mortgage (annual) constant (RM) and the nominal rate of interest (I).

Amortization Schedule - A schedule of debt repayment specifying the timing and amount of payments; a program of retiring debt through the scheduled, systematic repayment of principal.

Amortization - The process of retiring a debt or recovering a capital investment through scheduled, systematic repayment of principal; a program of periodic contributions to a sinking fund or debt retirement fund.

Anchor Bolt - A bolt embedded in a building foundation for use in fastening the building superstructure to the foundation.

Annual Percentage Rate (APR) - The effective annual interest rate. Truth in lending legislation requires that loan instruments and advertising show the interest cost to the borrower in the form of an annual rate, as distinguished from the nominal rate.

Anticipation - Market value accounts for the present worth of future benefits or detriments associated with the ownership of property.

Appraisal Date - The date as of which the assessments for a tax year are made.

Appraised Value - An estimate of the actual value of a property before the application of the legal assessment ratio and partial exemptions.

Apron - The wood trim beneath a window sill; also applied to concrete or blacktop area adjoining a building or loading dock.

Arable Land - Land suitable for cultivation.

Arm's-Length Sale - A sale between two unrelated parties, each of whom is reasonably knowledgeable of market conditions and under no undue pressure to buy or sell.

Ashlar - Cut stone laid in a definite pattern but seldom in regular courses.

Assessed Value - The monetary amount that a property is entered on the assessment roll for purposes of computing the tax levy. Assessed values differ from the assessor's estimate of actual value for three major reasons; fractional assessment ratios, partial exemptions, and decisions by assessing officials to override market value estimates.

Assessment Date - The status date for tax purposes. Appraised values reflect the status of the property and any partially completed construction as of this date. (October 1-Pretax year)

Assessment Level - The common or overall ratio of assessed values to market values.

Assessor - The head of an assessment jurisdiction, which may be an elected or appointed position.

Attribute - Characteristic, of a property.
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Balance - The principle of balance as used in appraising is that the greatest value in property will occur when the type and size of improvements and uses are proportional to each other as well as to the land.

Balloon Framing -Frame construction in which studs are fastened together in such manner as to form a continuous or single piece from floor to roof rather than using heavy timbers joined by mortises and tenons. Commonly used in barns.

Baluster - A small pillar or column supporting a coping or handrail.

Balustrade - An ornamental railing or parapet made of coping or a handrail and balusters.

Band Of Investment - A technique in which cash flow rates attributable to components of a capital investment are weighted and combined to derive a weighted average rate attributable to the total investment.

Base Line - A principle east-west line in the rectangular land survey system.

Baseboard - A trim board at the floor line of an interior wall.

Base-Lot Method - A method of appraising land parcels whereby each parcel to be appraised is compared with a parcel of known value, called the base lot.

Batten - A narrow piece of lumber commonly used to cover seam between two boards.

Bay Window - A window forming a recess in a room, and projecting beyond the regular exterior walls of a building.

Bay - A principal division or compartment of a building marked off by columns, pillars, or similar structural parts.

Beam - A principal horizontal load carrying structural member of a building.

Bowstring Truss - A roof or floor support having the form of a bow or arch.

Building Capitalization Rate (RB) – (1) The rate used to convert building income into an indication of building value in certain residual techniques or in a band of investment. (2) The ratio of building income to building value.

Building Residual Technique - A capitalization technique in which the net operating income attributable to improvements is isolated and capitalized by the building capitalization rate (RB) to indicate the improvements’ contribution to total property value. When the improvements’ value is added to the land value, a total property value is estimated.

Built-Up Method - A method of identifying the basic elements of compensable contribution in the development of a discount rate or capitalization rate. There are four basic components of a discount or capitalization rate; the pure or riskless rate, management, nonliquidity, and risk.

Built-Up Rate - An overall capitalization rate or a discount rate that represents the combination of a safe, or risk-free, rate and rates that reflect other factors, e.g., nonliquidity, management, risk.

Bundle of Rights - The six basic rights associated with the private ownership of property; right to use, sell, rent or lease, enter or leave, give away, and refuse to do any of these.

Buttress - A support built into and projecting from a masonry exterior wall to give additional strength to the wall.

BX Wiring- Electrical cable in flexible metal conduit.
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Cadastral Map - A map displaying property ownership boundaries, dimensions, and other useful information, such as parcel identification numbers.

Capitalization of Ground Rent - Method of estimating land value in the absence of comparable sales; applicable to farmland and commercial land leased on a net basis.

Capitalization of Income Method - Method of estimating accrued depreciation similar to the sales comparison method except that values based on the income approach are used instead of comparable sales.

Capitalization Rate - The ratio between net income and value. The current value of a property can be estimated by dividing its current or stabilized net income by the appropriate capitalization rate.

Capitalization Rate - Any rate used to convert income into value.

Carrara Glass - Heavy exterior structural glass commonly colored black.

Casement - A hinged window frame, commonly made so window will open outward.

Cash Equivalency Analysis - The procedure in which the sale prices of comparable properties sold with atypical financing terms are adjusted to reflect typical market terms.

Cash Equivalent - A price expressed in terms of cash, as distinguished from a price expressed totally or partly in terms of the face amounts of notes or other securities that cannot be sold at their face amounts.

Cash Flow Analysis - A study of the anticipated movement of cash in or out of real estate.

Cash Flow - The periodic income attributable to the interests in real property. See also, after-tax cash flow (ATCF); pre-tax cash flow (PTCF).

Change - The tendency of the social and economic forces affecting supply and demand to alter over time, thus influencing market value.

Chimney - An upright shaft of a fireproof enclosure for disposing of smoke or waste gas. A chimney may contain one or more flues.

Clapboard - Exterior wall wood siding with one edge thicker than the other. Also called lap siding.

Column - A heavy upright structural member carrying building weight.

Comparative Unit Method - (1) The most widely used method of cost estimating. Direct and indirect costs are summed and divided by an appropriate unit to derive a cost per unit. (2) A method of appraising land parcels in which an average or typical value is estimated for each stratum of land.

Competition - The potential to make a profit or get a bargain (when markets are not in equilibrium) attracts new suppliers and sellers. For a while, the addition of new suppliers will tend to lower prices and the increase in buyers will tend to raise prices. In time, however, production will match demand and prices will stabilize.

Conduit - A pipe or tube enclosing electrical wires, also a pipe or tunnel carrying water or enclosing pipes.

Conformity - The value of a property depends in part on its relationship to its surroundings. Value is created and sustained when the characteristics of a property conform to the demands of its market. Progression in value occurs when, the value of a lesser-quality property is favorably affected by the presence of a better-quality property; regression in value occurs when the value of a better-quality property is affected adversely by the presence of a lesser-quality property.

Consistent Use - Consistent use is the concept that land should -not be valued on the basis of one use, while the improvements are valued on the basis of another.

Contribution - The value of property component is measured in terms of its contribution to the value of the whole, rather than by its cost alone.

Conversion Factor - A multiplier used to bring costs and valuations into conformity with established standards as of a specified date.

Coping - The top covering of an exterior wall, commonly masonry, to give the wall a finished appearance and to shed water.

Corner Influence - An effect on value found most often in commercial properties because of greater case of entry and exit, accessibility to higher volume of traffic and increased show-window and advertising space.

Cornice - An ornamental projection at the top of exterior wall of a building.

Cost Approach - The method of estimating the value of property by: (1) estimating the cost of construction based on replacement or reproduction cost new or trended historical cost (often adjusted by a local multiplier); (2) subtracting depreciation; and, (3) adding the estimated land value. The land value is most frequently determined by the sales comparison approach.

Cost Index - An index showing the variations in construction costs over time.

Cost Manual - Cost manual is a set of cost factors organized in schedules or tables, with instructions for their use.

Cost of Development - A method that projects improvements to the land, estimates the total revenues and development costs, and calculates the value residual to the land after subtraction of all costs, expenses, and profit.

Cost to Cure - Estimated cost to correct or replace a component or defect within a property.

Course - A continuous horizontal layer of stone, brick, or other building material of uniform thickness in a building.

Curable - That part of depreciation that can be revised by correcting deferred maintenance and remodeling to relieve functional obsolescence.

Curable Depreciation - Items of physical deterioration and functional obsolescence that are economically feasible to cure. See Also curable functional obsolescence; curable physical deterioration.

Curable Functional Obsolescence - An element of accrued depreciation; a curable defect caused by a defect in the structure, materials or design.

Curable Physical Deterioration - An element of accrued depreciation; a curable defect caused by deferred maintenance.

Curtain Wall - A wall which does not support any of the building weight other than its own weight. A curtain may be removed and the building frame would still stand.
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Date of Sale (date of transfer) - The date upon which the sale is agreed. This is considered to be the date the deed, or other instrument of transfer, is signed.

Debt Coverage Ratio (DCR) - The ratio of net operating income to annual debt service (DCR=NOI/IM). Also called debt service coverage ratio (DSCR).

Debt Coverage - The ability of a property to meet its debt service out of net operating income.

Debt Sevice (IM) - The periodic payment that covers interest on and retirement of the outstanding principal of the mortgage loan. Also called mortgage debt service.

Debt - (1) One of two characteristic types of investment, the other being equity. The debt investor expects a priority of claim on investment earnings and looks for security in the form of a lien on the assets involved. Debt investors participate in bonds or mortgages and receive fixed or variable interest on investment with repayment of the principal upon maturity. (2) Money borrowed, usually for a specified period of time, which may be secured or unsecured.

Demand - Schedule showing the amount of a good or service that would be purchased at various prices during a given period.

Depreciation - The loss in value to property, after construction or purchase.

Depreciation Schedules - Tables used in mass appraisal that show the typical loss in value at various ages or effective ages for different types of properties.

Depreciation - The difference between the value of a building (or other improvement) and the cost of replacement at the same date.

Depth Factor - Standard, mechanical technique for determining the values of an urban land lot having certain depth from the value of a base lot having different dimensions.

Direct Capitalization – (1) The method used to convert an estimate of a single year’s income expectancy or an annual average of several of several year’s income expectancies into an indication of value in one direct step, either by dividing the income estimate by an appropriate rate or by multiplying the income estimate by an appropriate factor. (2) A capitalization technique that utilizes capitalization rates and multipliers extracted from sales. Only the first year’s income is considered. Yield and value change are implied but not identified.

Direct Cost - Cost incurred in construction on the site. For example: materials, labor, supervision and utilities.

Discounted Cash Flow ( DCF) Analysis - A set of procedures in which the quantity, variability, timing and duration of periodic income, as well as the quantity and timing of reversions, are specified and discounted to a present value at a specified yield.

Divided Rights - Rights to property that have been divided among several owners in partnerships, joint tenancy, tenancy in common, and time-sharing.

Drop Siding - Tongue and groove wood siding forming a weather tight wall used as sheathing and siding.

Drywall - Interior wall constructed of material other than plaster, such as wallboard, fiberboard, plywood, or other similar material.
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Economic (External) Obsolescence - A cause of depreciation that is a loss in value as a result of impairment inutility and desirability caused by factors outside the property's boundaries.

Economic Life (years) - The period of time during which buildings or other improvements on a property are expected to contribute positively to the value of the total property. At the end of this period, the improvements are normally demolished and replaced.

Economic Rent - See market rent.

Effective Age - The typical age of a structure with respect to condition and utility, as of the appraisal date.

Effective Age - Computed or estimated age caused by modernization or alterations which increase the life expectancy of the building or by adverse conditions which decrease the life expectancy of the building.

Effective Gross Income (EGI) - The anticipated income from all operations of real property adjusted for vacancy and collection losses.

Effective Gross Income Multiplier (EGIM) - The ratio between sale price or value and effective gross income; a single year’s EGI expectancy or an annual average of several year’s EGI expectancies. (EGIM=V/EGI).

Effective Interest Rate - Interest per dollar per period; the nominal annual interest rate divided by the number of conversion periods per year; also, the lender’s internal rate of return, if no points are paid. Also called effective rate. See also nominal interest rate (I).

Effective Tax Rate - The tax rate expressed as a percentage of market value. It will be different from nominal tax rate when the assessment level is not equal to one.

Ellwood Formula- The mortgage-equity procedure that provides precalculated mortgage coefficients for many combinations of equity yields and various mortgage terms; assumes that income flow is level and that property value increases, decreases, or remains stable.

Engineering Breakdown Method - A detailed age-life method that can be used in conjunction with the quantity-survey or unit-in-place methods of estimating RCN.

Enhancement - Increase in value due to improvements.

Equalization - The process by which an appropriate governmental body attempts to ensure that property under its jurisdiction is appraised equally at market value, or as otherwise required by law.

Equity Capitalization Rate (RE) - An income rate that reflects the relationship between a single year’s pre-tax cash flow expectancy, or an annual average of several years’ pre-tax cash flow expectancies, and the equity investment; used in direct capitalization to convert pre-tax cash flow into an equity value indication. Also called equity dividend rate, cash on cash rate, and cash flow rate (RE = pre-tax cash flow/equity).

Equity Ratio (1-M) - The ratio of down payment to total price; the fraction of the investment that is unencumbered by debt.

Exposed Beam Construction - A type of construction in which the roof is supported by heavy structural timbers rather than conventional rafters and in which the roof supports are exposed to the interior. This type of construction gives a rustic appearance.
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Fee Simple Absolute (fee simple) - In land ownership, complete interest in a property, subject only to governmental powers.

Fee Simple Estate - Absolute ownership unencumbered by any other interest or estate subject only to the four powers of government.

Firewall - A wall constructed of fire resistant material to prevent the spread of fire within a building or between buildings. Exterior firewalls commonly extend above the roof of the building.

Fixture - An item of equipment that, because of the way it is used, the way it is attached, or both, has become an integral part of a building, or other improvement. Once the fixture becomes an integral part of the building, it is classified as real property.

Flashing - Strips (usually metal) used at roof openings to make roofing joints waterproofed.

Flexicore - A hollow core precast reinforced concrete plank.

Flue - The lining of a chimney, commonly tile or metal.

Fractional Assessment - Assessments that by law or by practice have assessment ratio/levels different from one.

Fractional Section - A subdivision of a Township containing more or less than 640 acres of land. Typically accounting for the overage or deficiency in acreage is done on the north and/or west side of a section, and Fractional Sections are found on the north and/or west side of a Township.

Front Foot - A piece of land one foot wide abutting a street or highway and extending back the full depth of the parcel.

Functional Obsolescence - A cause of depreciation which is a loss in value due to inability of the structure to perform adequately, the function for which it is used, as of the appraisal date.

Functional Utility - The ability of improvements to satisfy market standards and demands.

Furring - Thin strips of wood, metal, or brick fastened to a wall or beam to level a surface for lathing, plastering attaching an additional surface, or for making an air space.
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- F -

Fee Simple Absolute (fee simple) - In land ownership, complete interest in a property, subject only to governmental powers.

Fee Simple Estate - Absolute ownership unencumbered by any other interest or estate subject only to the four powers of government.

Firewall - A wall constructed of fire resistant material to prevent the spread of fire within a building or between buildings. Exterior firewalls commonly extend above the roof of the building.

Fixture - An item of equipment that, because of the way it is used, the way it is attached, or both, has become an integral part of a building, or other improvement. Once the fixture becomes an integral part of the building, it is classified as real property.

Flashing - Strips (usually metal) used at roof openings to make roofing joints waterproofed.

Flexicore - A hollow core precast reinforced concrete plank.

Flue - The lining of a chimney, commonly tile or metal.

Fractional Assessment - Assessments that by law or by practice have assessment ratio/levels different from one.

Fractional Section - A subdivision of a Township containing more or less than 640 acres of land. Typically accounting for the overage or deficiency in acreage is done on the north and/or west side of a section, and Fractional Sections are found on the north and/or west side of a Township.

Front Foot - A piece of land one foot wide abutting a street or highway and extending back the full depth of the parcel.

Functional Obsolescence - A cause of depreciation which is a loss in value due to inability of the structure to perform adequately, the function for which it is used, as of the appraisal date.

Functional Utility - The ability of improvements to satisfy market standards and demands.

Furring - Thin strips of wood, metal, or brick fastened to a wall or beam to level a surface for lathing, plastering attaching an additional surface, or for making an air space.
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Geographic Information System (GIS) - One type of computerized mapping system capable of integrating spatial data (land information) and attribute data among different layers on a base map.

Girder - A structural member supported at both ends and designed to carry a load.

Gross Rent Multiplier (GRM) - The relationship or ratio between sale price or value and gross rental income.

Gross Rental Basis - Refers to a lease by which the lessor pays all operating expenses for the real estate.

Ground Area - Total area of enclosed portion of a building computed from exterior measurements taken at top of foundation.

Gunite - Concrete blown into place by compressed air.
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Header - A layer of brick or stone in a building wall with the short face to the front.

Highest and Best Use - Most profitable use at a specific time, given legal, physical and financial limitations.

Historical Cost - The original cost of a building, improvement, or personal property, as opposed to the current replacement, or reproduction cost.
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- I -

  IAAO - International Association of Assessing Officers.

Income Approach - The method of estimating the value of a property based on income capitalization. Income figures should reflect current market conditions and typical management.

Income Rate - A measure of investment that reflects the ratio of one year’s income or the annual average of several years’ income to value, e.g., overall capitalization rates (R0), equity capitalization rate (RE), mortgage constant (RM). Also called cash flow rate.

Incurable - A part of depreciation where it is not economical to correct the condition, and if corrected, the cost of correcting the condition exceeds the value.

Indirect Costs - Costs incurred in construction away from the site. For example: fees, permits, insurance and loans.

Intangible Personal Property - Rights over tangible real and personal property, but not rights of use and possession, for example, notes, bonds, stocks, patents, mortgages, copyrights, and insurance policies.

Inwood Annuity Capitalization - A traditional technique in which present value factors, or Inwood coefficients, from standard compound interest tables are used to discount a stream of level income to present worth; an annuity that can be capitalized with an Inwood factor, or coefficient.

Inwood Annuity - An ordinary level income stream.

Inwood Factor - A factor that reflects the present worth of $1 per period for a given number of periods, discounted at a given discount rate; obtained by calculation or from standard compound interest tables. Also called Inwood coefficient.

Inwood Premise - The premise stating that the present value of an income stream is derived by applying a single discount rate.
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Jamb - Upright side of a doorway, window, or fireplace.

Joist - Timber to which flooring or ceiling laths are fastened.
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- K -

Kellastone - Stucco exterior wall material with crushed rock finish and magnesite base.
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Land Capitalization Rate(RL) - (1) The rate used to covert land income into an indication of land value in certain residual techniques or in a band of investment. (2) The ratio of land income to land value.

Land Description Systems - commonly referred to as legal descriptions, are written descriptions of the physical boundaries of property rights.

Land Residual Technique - A capitalization technique in which the net operating income attributable to the land is isolated and capitalized to indicate the land’s contribution to total property value.

Lap Siding - Exterior wall siding with one edge thicker than the other, also called clapboard.

Law of Variable Proportions - Often called law of decreasing returns or the law of proportionality, which states that when the quantity of one productive service is increased by equal increments, the quantities of other productive services remaining fixed, the resulting increment of product will decrease after a certain point.

Lease Interest - One of the real property interests that results from the separation of the bundle of rights by a lease, i.e., the leased fee estate or the leasehold estate.

Leased Fee Estate - An ownership interest held by a landlord with the right of use and occupancy conveyed by lease to others; the rights of lessor or the leased fee owner and leased fee are specified by contract terms contained within the lease.

Leasehold Estate - The right to use and occupy real estate for a stated term and under certain conditions; conveyed by lease.

Lessee - One who has the right to use or occupy a property under a lease agreement; the leaseholder or tenant.

Lessor - One who holds property title and conveys the right to use and occupy the property under a lease agreement; the leased fee owner or landlord.

Lien - The legal right to take or hold property of a debtor as payment or security for a debt.

Lintel - Horizontal piece of timber, stone, or metal over doorway or window supporting the wall above the doorway or window.

Live Load - The weight carried by a floor by use including machinery, equipment, materials and persons.

Load Bearing Wall - A wall, which supports not only its own weight, but that of the walls and roof above it. A load-bearing wall, in contrast to a curtain wall, cannot be removed without destroying the building.

Local Multiplier - An adjustment to replacement or reproduction cost new or historical cost, to reflect local costs.

Long-Lived Items - Items that are the basic structure of a building and are not usually replaced during economic life. For example: foundation, roof structure, and framing.

Lot and Block Survey - A plat in which a larger parcel of land is subdivided into small units for the purpose of sale. Conveyances need to refer only to the lot, block, and plat book designation.

Louver - A ventilator built of slats slanted so as to admit air but to prevent water, snow, and other foreign ojects from entering the opening. The slats may be movable or rigid.
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Market Value - The most probable sale price of a property in terms of money in a competitive and open market, assuming that the buyer and seller are acting prudently and knowledgeably, allowing sufficient time for the sale, and assuming that the transaction is not affected by undue stimuli.

Marquee - Covering over the entrance to a theater, hotel, or store. A marquee usually is supported by supports from-the building.

Mass Appraisal - The systematic appraisal of groups of properties as of a given date using standardized procedures and statistical testing.

Meridian - A principle north-south line in the rectangular land survey system.

Metes and Bounds - A land description system in which boundaries are described as distances between two semi-permanent points or as lines following compass bearings.

Mill Type Construction - Heavy appearing structure with masonry load bearing walls, heavy wood framing, and heavy plank or laminated flooring.

Millage, Mill Rate - One mill is one-thousandth of one dollar or one-tenth of one cent. Used as a rate to calculate amount of taxes.

Model - Mathematical equations used to analyze quantities of data. Most of the models used in real estate appraisal are based on one of the three approaches to value.

Model Calibration - The development of adjustments, or coefficients based on sales analysis, that identifies specific factors that have an actual effect on market value.

Model Specification - The formal development of a model in a statement or equation, based on data analysis and appraisal theory.

Monitor Roof - A comparatively small roof structure built on the main roof to provide light and ventilation. Monitors are found mostly in barns, sheds, and industrial buildings.

Monolithic Concrete - Poured (solid) concrete.

Mortgage Constant (RM) - The capitalization rate for debt; the ratio of the annual debt service to the principle amount of the mortgage loan. Also called mortgage capitalization rate (RM = debt service/ mortgage principal).

Mortgage Debt Service (IM) - The periodic payment for interest on and retirement of the principal of a mortgage loan.

Mortgage Requirement - The periodic level payment, or installment, required for debt service, i.e., interest plus principal. on a direct reduction loan. See also mortgage constant (RM).

Mortice - A rectangular hole in one piece of wood cut to receive a projection on another piece, so as to form a Joint

Mud Sill Foundation - A foundation constructed of heavy timbers laid on the ground.

Mullion - Upright divider between windowpanes, or a series of joined doors, or panels.

Multiple Regression Analysis (MRA) - A statistical technique similar to correlation used to analyze data in order to predict the value of one variable (dependent), such as market value, from the known values of other variables (independent) such as lot size, number of rooms, etc.

MVS - Marshal Valuation Service, published by Marshall Swift.
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Neighborhood - The environment of a subject property that has a direct and immediate impact on its value.

Neighborhood Analysis - A study of the relevant forces that influence property values within the boundaries of a homogenous area.

Net Income - The income expected from a property, after deduction of allowable expenses.

Net Present Value (NPV) - The difference, if any between the present value of all expected benefits or positive cash flows, and the present value of capital outlays, or negative cash flows.

Newel Post - The post at the foot of a stairway, or in a winding stairway, the central, post around which the stairway winds.

Nominal Interest Rate (I) - A stated or contract rate; an interest rate, usually annual, that does not necessarily correspond to the true or effective rate of growth at compound interest; e.g., a true or effective 1% monthly interest rate may be called a nominal, annual interest rate of 12%, although true growth with monthly compounding amounts to slightly more than 12.68% per year. See also effective interest rate.

Nominal Tax Rate - A mathematical expression of the relationship between the tax levy and the total assessment for a jurisdiction. (Levy divided by assessment = nominal tax rate.)
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- O -

Observed Condition Breakdown Method - This method breaks down depreciation into all its various components; curable physical deterioration, incurable short-lived-item physical deterioration, incurable basis structure (long-lived items) physical deterioration, curable functional obsolescence, incurable functional obsolescence, and economic (external) obsolescence.

Obsolescence - Loss in property value due to causes other than physical deterioration such as becoming out of date, excess of supply over demand, or loss in desirability and use for the specific type of property.

Overall Age/Life Method - Method of estimating accrued depreciation based on straight-line depreciation in which the building is assumed to depreciate by a constant percentage each year over its economic life.

Overall Capitalization Rate ( RO) - An income rate for a total real property interest that reflects the relationship between a single years’ net operating income expectancy or an annual average of several years’ income expectancies, and total price or value; used to convert net operating income into an indication of overall property value (RO=NOI/V).

Over-improvement - A building having a value in excess of that which the value of the land on which it is built justifies.
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PAAA - Property Appraisal and Assessment Administration.

Parapet - A low wall at the edge of a roof, balcony, or terrace. May be an extension of the exterior wall above the roof.

Parcel - An area of land capable of being conveyed by a single legal description. A single piece of land under one ownership. May be a lot or acreage.

Parcel Identifiers - A code, usually numerical, representing a specific land parcel's legal description.

Parquet Floor - Flooring consisting of wood blocks laid in adhesive material in systematic (commonly colored) patterns.

Party Wall - A wall common to and separating two buildings.

Patio - An outside floor area, without roof, constructed of brick, tile, stone, state, or other similar material, usually adjoining a house and used as an outdoor living area. Same as a terrace.

Personal Property - Property that is not real is personal. Characteristic of personal property is its movability without damage to itself or the real estate.

Physical Deterioration - A cause of depreciation which is a loss in value due to wear and tear and the forces of nature.

Pier - Blocks of concrete, stone, or wood used in lieu of a foundation wall to support a building.

Pilaster - An upright column or pillar projecting from an exterior wall to provide added support to the wall, particularly at points of load concentration.

Planimeter - A mechanical device for measuring areas of plane surfaces by following property lines with a needle on the instrument. In appraisal and assessment work it is valuable for determining the acreage of parcels, particularly of irregular shaped parcels.

Pole Building - A building in which poles are placed upright in the ground and serve as the foundation and as the framework the building.

Price - Amount paid for an item.

Principal Building - A main building such as a residence, apartment building, motel, commercial or industrial building.

Private Encumbrances - Private hindrances that affect value and sale price such as: easements, condominium controls, and deed or subdivision restrictions.

Property - An aggregate of things, or rights to things, which are protected by law. There are two basic types of property: real, and personal.

Property Record Card - Card on which description and measurements of each parcel of land and buildings thereon are recorded, and on which the valuation Of the property is computed.

Property Tax Levy - The total amount of money to be raised from the property tax as set forth in the budget of a taxing jurisdiction.
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Qualitative - Pertaining to the subjective nature of some variable of interest. For example, view, fire protection, quality, or site/location.

Quantitative - Pertaining to the objective nature of some variable of interest. It can be measured or counted with little ambiguity. For example, number of bathrooms, year built, additions, or size.

Quantity Survey Method - Method of cost estimating which requires complete itemization of all construction, labor, and material costs by components and subcomponents and all indirect costs.

Quarter Section - A subdivision of a Section containing 160 acres more or less, described by referencing the center point in the Section, i.e. the NE 1/4 is north and east of the center point.
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Rafter - A beam, usually sloping, supporting a roof.

Ramp - An inclined runway or walkway.

Range Lines - Lines in succeeding six-mile increments on either side of a Meridian.

Ratio Study - A study of the relationship between appraised values and market values. Indicators of market values may be either sales, or independent appraisals. The common interest in ratio studies is the level and uniformity of the appraisals.

RCN - Replacement cost new / reproduction cost new.

Real Estate - The physical parcel of land and all improvements permanently attached.

Real Property - The rights, interests, and benefits connected with real estate.

Recapture Rate - The annual rate at which capital investment is returned to an investor over a specified period; the annual amount, in addition to interest or return on interest (compound interest), which can be recaptured from an investment, divided by the original amount invested. The term was once mainly used in reference to wasting assets. A recapture rate now applies to situations in which some regular annual income may be provided to compensate for loss in invested capital. When capital is recovered gradually through income, the recapture rate is the difference between the income rate for the interest being appraised and the required internal rate of return on the capital invested in that interest. It can be positive, negative, or zero.

Reconciliation, Correlation - the final step in the appraisal process which resolves the differences that result from the application of the three approaches to value.

Rectangular Coordinates - A land description system where boundaries are described as lines running from points on a X and Y grid.

Rectangular Land Surveys - Land description systems based on permanent, uniformly sized rectangular grids which can be subdivided into smaller units of land.

Regular Section - A one square mile subdivision of a township containing 640 acres.

Remaining Economic Life - The number of years remaining in the economic life of a structure as of the appraisal date, and provides a basis for estimating replacement cost new less depreciation.

Replacement Cost - The cost of constructing a substitute structure of equal utility using current materials, design and standards.

Reproduction Cost - The cost of constructing a replica, or identical structure, using the same materials, construction standards, design and quality of workmanship.

Riser - Upright part of a stair step.

Risk Analysis - Quantitative methods that assess risk according to probable occurrence. See also probability analysis; utility functions.

Risk Factor - The portion of a given return or rate of return from capital invested in an enterprise that is assumed to cover the risks associated with the particular investment; as distinguished from, and in excess of, the return or rate obtainable from funds invested where the safety of principal is virtually assured.

Risk Rate - The annual rate of return on capital that is commensurate with the risk assumed by the investor; the rate of interest or yield necessary to attract capital.

Risk - The probability that foreseen events will not occur. See also probability; uncertainty.

Risk-Adjusted Discount Rate - In risk analysis, a discount rate that includes all of the elements of risk associated with an income stream for a specified period and adjusted to offset additional term risk.

Romex Wiring - Electrical cable in flexible non-metallic conduit.

Rurban Land - Small tracts of land having both urban and rural characteristics, and located outside of the corporate limits of a town, village, or city and outside of densely populated outlying subdivisions.
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Safe Rate - The rate that can be obtained on an investment with maximum safety and minimum risk.

Sale Price - The price for which a property was sold.

Sale Ratio/Assessment Ratio - The ratio of an appraised (or assessed value) to the sale price, or adjusted sale price of a property.

Sales Comparison Approach - Method of estimating accrued deprecation through the comparison of sale prices of similar properties.

Sales Comparison Method - Method of estimating the value of a property based on an analysis of sales of similar properties.

Sales Ratio Study - A ratio study that uses sales prices as proxies for market values.

Sash - A frame for holding panes of glass in a window or door.

Saw Tooth Roof - A roof whose cross section resembles the teeth of a saw. The vertical side of the roof has windows to provide ventilation and light.

Separated Rights - Rights to property that have been separated by deed such as: air, mineral, water, and leaseholds.

Sheathing - The inner covering placed next to the studding or rafters of the walls or roof of a building.

Shed Roof - A lean-to single slope roof.

Sheetrock - Trade name for drywall sheets with a gypsum base and paper covering.

Short-Lived Items - Items of a structure which have a shorter life than the basic structure. For example: roofing, water heaters, floor covering and interior finish.

Siding - Finished exterior wall of a frame building.

Sill - The bottom horizontal member of a window or door.

Single Property Appraisal - systematic appraisal of properties one at a time

Sinking Fund Factor (1/Sn) - The compound interest factor that indicates the amount per period that will grow, with compound interest, to $1.

Sinking Fund - A fund in which periodic deposits of equal amounts of money are accumulated to pay a debt or replace assets; usually designed to receive equal annual or monthly deposits that will accumulate, with compound interest, to a predetermined sum at the end of a stated period of time.

Site Amenities - The specific location-related attributes of a property; such as topography, utilities, street traffic, view, etc.

Situs - The physical location of property.

Sleeper - Strips of lumber fastened to the sub-floor for fastening finish flooring to and for providing a dead air space beneath the flooring.

Span - The horizontal distance between supports, as for an arch or roof.

Spandrel Beam - A beam between two columns for carrying the exterior wall of a building.

Spandrel - The triangular space between the curves of an arch and the straight line construction above the curves.

Split-Level House- A house with living area on two or more floors separated by about one-half standard story of height.

Sprinkler System - A fire protection system consisting of overhead water pipes and nozzles so installed and regulated that water is sprayed automatically over the protected area when the temperature in the area reached a predetermined point.

Stile - Upright piece in the frame of a door or window.

Stratify - For purposes of analysis, to divide a sample of observations into two or more subsets, according to some criterion, or set of criteria.

Studding - Upright framework to which walls of a building are attached.

Sub floor - Rough flooring laid on floor joists to form a base for finish flooring.

Substitution - A property’s value tends to be set by the potential cost of acquiring or producing an equally desirable substitute property.

Substructure - The part of a building below the top of the foundation.

Superstructure - The part of a building above the top of a foundation.

Supply - A schedule showing the amount of a good or service that would be offered for sale at various prices during a given period.

Surplus Productivity - The income from a property remaining after the costs of labor, management, and capital have been paid. This income is attributable to the land.

Suspended Ceiling - A ceiling hung below the ceiling joists.
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Tax Map -A map showing all lots and tracts of land in their relative size, shape, and location. Also known as plat map, or property location map.

Tenon - The end of a piece of wood cut so as to fit into a hole in another piece of wood, and so form a joint.

Terra Cotta - A clay and fine sand structural product used mainly-for facings and ornamentation.

Terrace - An outside floor area, without roof, constructed of concrete, brick tile, stone, slate, or other similar material, usually adjoining a house and used as an outdoor living area. Same as a patio.

Terrazzo - A highly polished flooring made of wet cement and marble chips.

Through Lot - A lot abutting two parallel, or approximately parallel, streets.

Tilt-Up Construction - Concrete exterior wall construction in which precast reinforced concrete sections are lifted into position in the wall. This type of construction is sometimes found in commercial and industrial buildings.

Time-Adjusted Sale Price - An amount of money, or the value of a commodity in dollars, expected to be receivable in the future is always worth less than an equal amount actually in hand at the present.

Tongue and Groove - Lumber (usually flooring or siding) or other building material in which one edge has a projecting tongue and the opposite edge has a groove that fits over the tongue of matching material to form a locked joint.

Township - An approximately 36 square mile division of land employed in the Rectangular Land Survey System. Townships are bounded by two successive Range Lines on the east and west and two successive Township Lines on the north and south.

Township Lines - Lines in succeeding six mile increments on either side of a Base Line.

Tract - A single piece of land under one ownership. Maybe a lot or acreage. Same as parcel.

Transite - Building material made of asbestos fibers and cement under pressure.

Transom - A low window opening above a door or another window.

Tread - The top, or horizontal, part of a stair step.

Truss - A series of beams, bars and similar structural members assembled into an open web pattern to support a roof or floor, itself supported at both ends.
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Under-improvement - A building having a value less than that which the value of the land on which it is built justifies.

Unit Foot Value - The value of a piece of land one foot wide abutting a street or highway and extending back from the front the standard lot depth.

Unit Front Foot - A piece of land one foot wide abutting a street or highway and extending back from the front the standard lot depth.

Unit Heater - A complete heating unit, without ducts, for heating the area in which it is located, such as a room or other part less than the complete area, of a building.

Unit Land Value Map - A map showing the value of land per unit front toot, square foot, or acre in an assessment area.
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Wainscot - The lower part of an interior wall (approximately four feet high) when finished different from the remainder of the wall, as with tile.

Wall Ratio - Relationship of the exterior walls (perimeter) of a building to the ground area of the building. The wall ratio is used for determining the base unit cost of commercial and industrial buildings, and is found by dividing the square feet of the building ground area by the perimeter of the exterior walls.

Wallboard - An interior wall and ceiling fiber material cut into sheets for use in place of plaster.

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