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Appraisal Terms

Abandonment—1) Cessation of the use of right of way or activity thereon with no intention to reclaim or use again. 2) The act of vacating real property and/or the leaving of fixtures or other attachments.

Abstract—To reduce a legal description of a property to another form; also, to identify a property from its legal description.

Access—1) The means or way by which a property is approached. 2) The means or method of entrance into or upon a property.

Access Rights—1) The right of ingress to and egress from a property which abuts upon an exiting street or highway. It is an easement in the street that is appurtenant to abutting property and is a private right as distinguishable from the rights of the public. It is well-established law in the United States that the right of access cannot be denied or unreasonably restricted unless other reasonable access is available or provided or compensation is awarded. 2) The right of a riparian owner to pass to and from the waters upon which the premises border.

Accrued depreciation—See Depreciation.

Acre—A land measure of 160 square rods or 43,560 square feet.

Actual Age—The number of years elapsed since an original structure was built. Sometimes referred to as historical or chronological age.

Aerial photo—Airplane photography of entire U.S. land mass taken by Federal Government every few years. Available from County Agricultural Stabilization and Conservation Service Office.

Age/Life Method—A method of estimating accrued depreciation founded upon the premise that, in the aggregate, a mathematical function can be used to infer accrued depreciation from the age of a property and its economic life.

Agricultural property—Land and improvements devoted to or best adaptable for the production of crops, fruits, timber and the raising of livestock.

Air rights—The right to inclusive and undisturbed use and control of a designated air space within the perimeter of a stated land area and within stated elevations. Such rights may be acquired for the construction of a building above the land or building of another, or for the protection of the light and air of an existing or proposed structure on an adjoining lot.

Alley influence—The enhancement to the value of a property rising out of the presence of an abutting alley, most generally applicable to commercial properties.

Allocation—The allocation of the appraised total value of the property between the land and improvements.

Condominium—A form of fee ownership of whole units or separate portions of multi-unit buildings by statute which provides the mechanics and facilities for formal filing and recording of a divided interest in real property, where the division is vertical as well as horizontal. Fee ownership of units in a multi-unit property and joint ownership of the common areas. Not to be confused with “Cooperative.”

Conformity, principle of—Holds that the maximum of value is realized when a reasonable degree of homogeneity, sociological as well as economic, is present. Thus, conformity in use is usually a highly desirable adjunct of real property, since it creates and/or maintains maximum value.

Consideration—The amount of money and other valuable goods or services upon which a buyer and a seller agree to consummate a sale.

Consistent use—Maintains that a property in transition to another use cannot be valued on the basis of one use for the land and another for the improvements.

Contour line—Outline of a figure, body, mass; lines representing such an outline as the edge of the water of a lake. A line on a topographic map or chart connecting the points on a land surface which have the same elevation.

Contract rent—Payment for the use of property as designated in a lease. Used to establish the fact that the actual rent designated, or contract rent, may differ from market rent.

Contribution, principle of—A valuation principle which states that the value of an agent of production or of a component part of a property depends upon how much it contributes to the value of the whole; or how much its absence detracts from the value of the whole. The Principle of Contribution is sometimes known as the Principle of Marginal Productivity.

Corner influence—The enhancement of the value of a property rising out of its corner location; most generally applicable to commercial properties.

Cost approach—One of the three traditional approaches to value by which an indication of the value of a property is arrived at by estimating the value of the land, the replacement or reproduction cost new of the improvement, and the amount of accrued depreciation to the improvement. The estimated land value is then added to the estimated depreciated value of the improvements to arrive at the estimated property value.

Cost factor—A factor or multiplier applied to a replacement or reproduction cost to account for variations in location and time, as well as for other elements of construction costs not otherwise considered.

Cover crop—A crop planted principally for the purpose of controlling wind or water erosion during the dormant season. It is normally plowed under and not harvested.

Crop rotation—The practice of alternating, usually on an annual basis, field crops, such as corn or wheat, with legumes in order to maintain or improve the structure and productivity of the soil.

Cubic content—The cubic volume of a building within the outer surface of the exterior walls and roof and the upper surface of the lowest floor.

Cubic yard—A measure of volume that is three feet wide, three feet high, and three feet deep. There are 27 cubic feet in a cubic yard.

Curable depreciation—Those items of physical deterioration and functional obsolescence that are economically feasible to cure and hence are customarily repaired or replaced by a prudent property owner.

Deed—A written instrument that conveys an interest in real property. A quit claim deed conveys the interest described therein without warranty of title. A trust deed conveys interest described therein to a trustee. A warranty deed conveys the interest described therein with the provisions that the freehold is guaranteed by the grantor, and the grantor’s heirs or successors.

Delinquent taxes—Taxes remaining unpaid on and after a date upon which a penalty for nonpayment is normally attached.

Depreciation—Loss in value from all causes; may be further classified as physical, referring to the loss of value caused by physical deterioration; functional, referring to the loss of value caused by obsolescence inherent in the property itself; and economic, referring to the loss of value caused by factors extraneous to the property. Accrued depreciation refers to the actual depreciation existing in a particular property as of a specified date. Normal depreciation refers to that amount of accrued depreciation one would normally expect to find in buildings of certain construction, design, quality and age.

Depreciation allowance—A loss of value expressed in terms of a percentage of replacement or reproduction cost new.

Depth factor—A factor or multiplier applied to a unit land value to adjust the value in order to account for variations in depth from an adopted standard depth.

Depth table—A table of depth factors.

Design factor—A factor or multiplier applied to a computed replacement cost as an adjustment to account for cost variations attributable to the particular design of the subject property which were not accounted for in the particular pricing schedule used.

Deterioration—Impairment of structural condition evidenced by the wear and tear caused by physical use and the action of the elements, also referred to as physical depreciation.

Drain tile—A specially designed pipe used in a drainage system.

Easement—A non-possessing interest held by one person in land of another person whereby the first person is accorded partial use of such land for a specific purpose. An easement restricts but does not abridge the rights of the fee owner to the use and enjoyment of the easement holder’s rights. Easements fall into three broad classifications: surface easements, subsurface easements and overhead easements.

Economic life—The life expectancy of a property during that it can be expected to be used profitably.

Economic obsolescence—Loss in value of a property (relative to the cost of replacing it with a property of equal utility) that stems from factors external to the property. For example, a buggy-whip factory, to the extent that it cannot be used economically for anything else, suffers substantial economic obsolescence since automobiles have replaced horse drawn buggies.

Economic rent—The rent which a property can be expected to bring in the open market as opposed to contract rent which is the rent the property is actually realizing at a given time. Also called market rent.

Effective age—The typical age of a structure equivalent to the one in question with respect to its utility and condition. Knowing the effective age of an old, rehabilitated structure or a building with substantial deferred maintenance is generally more informative than knowing its chronological age.

Effective depth—In reference to property valuation, that depth, expressed in feet, upon which the selection of the depth factor is based.

Effective gross income—The estimated gross income of a property less an appropriate allowance for vacancies and collection losses.

Effective valuation date—In reference to a revaluation program, the date as of which the value estimate is applicable.

Eminent domain—The right by which a sovereign government, or some person acting in its name and under its authority, may acquire private property for public or quasi-public use upon payment of reasonable compensation and without consent of the owner. The right or power of the government to take private property for public use upon making just compensation.

Encroachment—The displacement of an existing use by another use.

Engineering breakdown—A method of estimating accrued depreciation under which separate estimates are made for the individual components and then totaled.

Environmental deficiency—A neighborhood condition such as adverse land uses, congestion, poorly designed streets, etc. operating to cause economical obsolescence and, when coupled with excessive structural deterioration, blight.

Escheat—Reversion of property to the state when the owner dies without leaving a will or heirs.

Excessive frontage—Frontage because of the particular utility of the lot does not add value to the lot.

Exchange value—The value, in terms of money, of a commodity to persons generally; as opposed to use value of a specific person.

Exempt property—Property not subject to general property taxation.

Feasibility Analysis—A study of the cost-benefit relationship of an economic endeavor.

Fee appraisal—Appraisals of property one at a time for a fee.

Fee simple—In land ownership, complete interest in a property, subject only to governmental powers.

Flood plain—The nearly flat surfaces along the courses of rivers and streams that are subject to overflow and flooding.

Functional depreciation/obsolescence—See depreciation.

Functional utility—The composite effect of a property’s usefulness and desirability upon its marketability.

General property—All taxable real and personal property except that which is taxed under chapters 76 and 77. It includes manufacturing property subject to s. 70.995, Stats., but does not include exempt property, private forest croplands, woodland tax law lands, or public lands.

Goodwill—An intangible, saleable asset arising from the reputation of the business and its relation with its customers as distinguished from the value of the physical plant and its stock.

Government lots—Those land areas which, because of location of size, could not be divided into sections and quarters under government survey. Such tracts usually lie along the edge of rivers or lakes and extend from the waterline to the first section boundary.

Government survey—A ground survey authorized by the Continental Congress in 1785 and by subsequent congressional acts, encountered in Florida, Alabama, Mississippi, and all states (except Texas) north of the Ohio or west of the Mississippi Rivers. The land is divided into townships approximately six miles square, each township normally containing 36 sections and each section normally containing 640 acres.

Grade—The classification of an improvement based upon certain construction specifications, and quality of materials and workmanship.

Grade factor—A factor or multiplier applied to a base grade level for the purpose of interpolating between grades or establishing an intermediate grade.

Grantee—A person to whom property is transferred and property rights are granted by deed, trust instrument, or other similar documents.

Grantor—A person who transfers property or grants property rights by deed, trust instrument, or other
similar documents.

Gross area—The total floor area of the building measured from the exterior of the walls.

Gross income—In reference to property valuation the scheduled annual income produced by the property.

Gross income multiplier—A multiplier by which gross income of a property is multiplied and its value estimated.

Gross sales—The total amount of invoiced sales before making any deductions for returns, allowances, etc.

Ground lease—A document entitling the lessee certain specified rights relating to the use of the land.

Ground rent—Net rent from a ground lease; that portion of the total rent which is attributable to the land
only.

Highest and best use—A concept in appraisal and assessment law requiring that each property be appraised as though it were being put to its most profitable use, given probable legal, physical and financial constraints.

Horizon—A layer of soil approximately parallel to the land surface with more or less well-defined characteristics that have been produced through soil building processes.

Income approach—One of the three traditional approaches to value which measures the present worth of the future benefits of a property by the capitalization of its net income stream over its remaining economic life. The approach involves making an estimate of the potential net income the property may be expected to yield, and capitalizing that income into an indication of value.

Income property—A property primarily used to produce a monetary income.

Increasing and decreasing returns—A valuation principle stating that when successive increments of one or more factors of production are added to fixed amounts of the other factors there is a resulting enhancement of income (in dollars, benefits, or amenities), initially at an increasing rate to a point of maximum return and then decreasing until eventually the increment to value becomes increasingly less than the value of the added factor (or factors). The Principle of Increasing and Decreasing Returns is sometimes known as the Principle of Diminishing Returns or the Principle of Variable Proportions.

Incurable depreciation—Elements of physical deterioration or functional obsolescence which either cannot be corrected; or if possible to correct, cannot be corrected except at a cost in excess of their contribution to the value of the property.

Industrial park—A subdivision designed and developed to accommodate specific types of industry.

Industrial property—Land, improvements, and/or machinery used or adaptable for use in the production of goods either for materials, or by changing other materials and products i.e., assembling, processing and manufacturing as well as the supporting auxiliary facilities.

Influence factor—A factor serving to either devalue or enhance the value of a particular parcel of land, or portions thereof, relative to the norm for which the base unit values were established; generally expressed in terms of a percentage adjustment.

Institutional property—Land and improvements used in conjunction with providing public services and generally owned and operated by the government or other non-profit organizations, hospitals, schools, prisons etc. Such property is generally exempt from paying property taxes.

Interest—The premium paid for the use of money; the interest rate usually incorporates a risk factor, a nonliquidity factor, a time-preference factor, an inflation factor and potentially others, too.

Investment analysis—A study reflecting the relationship between acquisition price and anticipated future benefits of a real estate investment.

Irrigation—The artificial application of water to the soil for full crop production when the rainfall is not sufficient at the time of need, or in arid regions.

Joint tenancy—Refers to the situation where two or more individuals own inseparable interest in a parcel of real property, i.e., an individual does not own a particular part of a property, but owns a proportionate share of the entire property. The ownership interests of each individual expire with the individual’s demise and cannot be transferred through a will, except in the case of the last survivor (the right of survivorship).

Land classification—The classification of land based upon its capabilities for use; and/or production.

Land contract—A purchase contract wherein the grantee takes possession of the property with the grantor retaining the deed to the property until the terms of the contract are met as specified.

Land residual technique—Land valuation technique which requires the value of the building(s) to be known; the value of the land can then be indicated by capitalizing the residual net income remaining after deducting the portion attributable to the building(s).

Landscaping—Natural features such as lawns, shrubs, and trees added to a plot of ground or modified in such a way to make it more attractive.

Land use restrictions—Legal restrictions regulating the use to which land may be put.

Lean-to—A small structure with a single pitched roof, usually erected against an outside wall of a larger structure.

Lease, lessee, lessor—A written contract by which one party (lessor) gives to another party (lessee) the possession and use of a specified property, for a specified time and under specified terms and conditions.

Leased fee—A property held in fee with the right of use and occupancy conveyed by lease to others. A property consisting of the right to receive ground rentals over a period of time, plus the right of ultimate repossession at the termination of the lease.

Leasehold—The interests in a property associated with the lessee (tenant).

Leasehold improvements—Additions, renovation and similar improvements made to a leased property by the lessee.

Leasehold value—The value of a leasehold; the difference between the contractual rent and the currently established economic or market rent.

Legal description—A description of a parcel of land that serves to identify the parcel in a manner sanctioned by law.

Lessee—One who possesses the right to use or occupy a property under lease agreement; a tenant.

Lessor—One who holds title to and conveys the right to use and occupy a property under lease agreement; a landlord.

Life estate—An interest in property that lasts only for a person’s lifetime; thus the person in question is unable to leave the property to that person’s heirs.

Lister—A field inspector whose principle duty is to collect and record property data (not an appraiser). Also referred to as a data collector.

Management fee—As an item of expense, the sum paid or the amount equivalent to the value of management service.

Market Analysis—A study of real estate market conditions for a specific type of property.

Market data approach—One of the three traditional approaches to value by which an indication of the value of a property is arrived at by compiling data on recently sold properties which are comparable to the subject property and adjusting their selling prices to account for variations in time, location and property characteristics between the comparables and the subject property.

Market rent—The rental income a property would most probably command on the open market as indicated by current rentals being paid for comparable space (as of the effective date of appraisal). This is preferred to the term “Economic Rent” which has traditionally been used in appraisal analysis, even though both are currently considered synonymous.

Market value—The most probable sale price of a property in terms of money in a competitive and open market, assuming the buyer and seller are acting prudently and knowledgeably, allowing sufficient time for the sale and assuming the transaction is not affected by undue pressures.

Metes and bounds—Angles and distances; a description of a parcel of land accomplished by beginning at a known reference point, proceeding to a point on the perimeter of the property being described, and then tracing the boundaries until one returns to the first point on the perimeter, usually a corner. The angles are described by reference to points of the compass, and the distances are described in feet or chains; curves are treated as arcs on a circle.

Mineral rights—The right to extract subterranean deposits such as oil, gas, coal and minerals as specified in the grant.

Minimum rental—The portion of the rent in a percentage lease that is fixed.

Modeling method—A method of computing the replacement or the reproduction cost of an improvement by applying the cost of a specified model and adjusting the cost to account for specified variations between the subject improvement and the model.

Modernization—Corrective action taken to update a property so it conforms to current standards.

Mortgage, mortgagee, mortgagor—A legal document that an owner of a property (mortgagor) pledges the property to a creditor (mortgagee) as security for the payment of a debt.

Neighborhood—A geographical area exhibiting a high degree of homogeneity in residential amenities, land use, economic and social trends and housing characteristics.

Neighborhood trend—Stages in the life cycle of a neighborhood the improving stage characterized by development and growth; the static stage characterized by a leveling off of values; and the declining stage characterized by infiltration and decay and revitalization.

Net income—The income remaining after deducting allowable operating expenses from effective gross income.

Net lease—A lease wherein the lessee assumes to pay certain applicable operating expenses related to the cost of ownership.

Non-conforming use—A use which, because of modified or new zoning ordinances, no longer conforms to current use regulations, but is nevertheless upheld to be legal as long as certain conditions are adhered to.

Observed depreciation—Loss in value that is discernible through physical observation by comparing the subject property with a comparable property that is either new or capable of rendering maximum utility.

Obsolescence—A diminishing of a property’s desirability and usefulness brought about by either functional inadequacies or over-adequacies inherent in the property itself, or adverse economic factors external to the property. Refer to functional depreciation and economic depreciation.

Occupational tax—A tax/charge on a particular trade or profession, paid and collected in the same manner as taxes on personal property; not a general property tax.

Omitted property—Real or personal property not assessed in any of the 2 previous years and entered on the assessment roll once for each previous year of omission. The value affixed by the assessor is what it should have been assessed at in the year of omission according to the assessor’s best judgment.

Operating expenses—The fixed expenses, operating costs and reserves for replacements required to produce net income and are deducted from effective gross income in order to arrive at net income.

Operating income—Income derived from the general operation of a business. Not synonymous with net profit, but rather indicates a stage in profit-and-loss account where all direct costs of operation and all direct income from operation have been taken into account and nothing else.

Overall rate—A capitalization rate representing the relationship of a net income of a property to its value it contains, in their proper proportions, the elements of both the land and the building capitalization rates.

Parcel—Piece of land held in single ownership.

Parcel count—The number of assessments of land/improvements by class on the assessment roll.

Parcel identification number—An identification number assigned to a parcel of land to uniquely identify that parcel from any other parcel within a given taxing jurisdiction.

Parent material—The unconsolidated mass from which the soil profile develops.

Pasture—Land devoted to the production of tame or native forage that is harvested directly by livestock.

Percentage lease—A type of lease where the rental is based on a percent of income (gross/net) usually with a guaranteed base rental.

Percolation—The term is used to describe the seepage of water through soil; the ability of soil to absorb water or other liquid as effluent from a septic system.

Permeability—A term used to discuss the behavior of water in soil. A soil easily permeated by water would be friable, deep, and without dense or compacted horizons restricting free movement of water.

Personal property—All goods, wares, merchandise, chattels and (see s. 70.04, Stats.) effects of any nature or description having any real or marketable value and not included in the term real property. It also includes toll bridges; private railroads and bridges; saw logs, timber, and lumber either upon land or floating; steamboats, ships, and other vessels whether at home or abroad; ferry boats including the franchise for running them; ice cut and stored for use, sale, or shipment; manufacturing machinery and equipment defined in s. 70.11(27), Stats.; and entire property of companies defined in s. 76.02(8), Stats., located entirely within one municipality.

Plat—A map intended to show the division of land into lots or parcels. Upon recordation with the appropriate authorities, land included in the plat can be legally described by reference to the plat, omitting a metes-and-bounds description.

Plat book—A record showing the location, size and name of owner of each plot of land in a stated area.

Police power—The right of government to limit the exercise of property rights in real estate, without compensation, provided the limitation is not specific to one parcel. The limitation is to serve the interest of public health, public safety, public morals and the general welfare.

Present worth—The current monetary value. It is the discounted value of aggregate future payments.

Principal meridians—Boundary lines indicating the rectangular survey system of the continental United States. Farmland description is by rectangular survey.

Productivity—1) The capacity of a soil to produce crops under the environment where it occurs and under a specified system of management. 2) The amount of goods produced by labor, or other factors of production, per unit of time. 3) The net value of the services provided by space. Productivity is a direct function of use.

Progression; principle of—Indicates the value of a lessor object is enhanced by association with better objects of the same type.

Property inspection—A physical inspection of a property for the purpose of collecting and/or reviewing property data.

Quantity survey method—A method of computing the replacement or the reproduction cost of an improvement by applying unit costs to the actual or estimated material and labor quantities and adding an allowance for overhead, profit and all other direct and indirect construction costs.

Quarter (Section)—In public land survey, it is a division of a section containing 640 acres, the quarter being 160 acres.

Range—One of a series of government survey lines extending due north and south at six-mile intervals and are numbered east or west from the principal meridian. These form the east and west boundaries of townships.

Real estate—The physical land and appurtenances affixed thereto; often used synonymously with real property.

Real property—The terms “real property” and “real estate” shall include the land and all buildings and improvements thereon, and all fixtures and rights and privileges appertaining thereto, except that for the purpose of time-sharing property as defined in s. 707.02(32), real property does not include recurrent exclusive use and occupancy on a periodic basis or other rights, including, but not limited to, membership rights, vacation services and club memberships.

Recapture rate—The rate at which an investment is returned to the investor. The annual amount which can be recaptured (or allocated for future recapture), divided by the amount of the original investment.

Reconciliation—The process by which the appraiser evaluates, chooses and selects from among two or more alternative conclusions or indications to reach a final value estimate.

Regression—The measurement of the closeness with which two or more variables are associated.

Remaining economic life—The number of years remaining in the economic life of the structure or structural component, as of the date of the appraisal.

Rent—The amount paid for the use of a capital good. See economic rent.

Replacement cost—The current cost of reproducing an improvement of equal utility to the subject property; it may or may not be the cost of reproducing a replica property.

Reproduction cost—The current cost of reproducing an improvement having exactly the same characteristics as the improvement in question.

Reserve for replacements—A reserve established to cover renewal and replacements of short-lived items that will not last for the remaining economic life of a property.

Residential property—Vacant or improved land devoted to or available primarily as a place to live.

Restrictive covenant—A private agreement restricting the use and occupancy of real estate that is a part of the conveyance and is binding on all subsequent purchasers. Such covenants may have to do with control of lot size, setback and/or placement of buildings, architecture and cost of improvements.

Right of way—The privilege which one person or persons particularly described, may have of passing over the land of another in some particular line. Usually, an easement over the land of another. The term is used to describe a strip of land used for railroad and highway purposes, for pipe or pole lines and for private or public passageways.

Sales ratio study—A statistical analysis of the distribution of assessment ratios of a sample of recent sales made for the purpose of drawing inferences regarding the entire population of parcels from which the sample was abstracted.

Salvage value—The price one would be justified in paying for an item of property to be removed from the premises and used elsewhere.

Scarcity value—Value caused by a demand for a good when the supply cannot be increased. Antique furniture is an example.

Scrap value—The price for a part of a property for sale and removal from the premises for the reclamation of the value of the basic material itself, such as copper.

Section—In public lands survey, one of the 36 sections, each a mile square, that each township is divided.

Set-back—The term refers to zoning regulations designating the distance a building must be set-back from the front property line, or the height at which the upper floors of a building are recessed, set-back from the face of a lower structure. In tall buildings there may be more than one set-back.

Site—A parcel of land that is improved to the extent that it is ready for use for the purpose it is intended.

Site development costs—All costs incurred in the preparation of a site for use.

Slope—The inclination or deviation of a surface from the horizontal; the grade. The degree of inclination usually expressed as a percentage, in highway usage it refers to the graded area beyond the shoulder area extending to natural and undistributed ground.

Software—1) Computer programs. 2) Those parts of a computer system that are not machinery or circuits; procedures and possibly documentation are included along with programs.

Soil erosion—The wearing or carrying away of the topsoil by running water or wind.

Soil productivity—The capacity of a soil to produce crops under the environment where it occurs and under a specified system of management.

Soil profile—A vertical section of the soil through all its horizons and extending into the parent material.

Soil series—A grouping of soils having the same character of profile; the same general range in color, structure, consistence, sequence of horizons, and the same conditions of relief and drainage; and of common or similar origin (parent material) and mode of formation.

Soil survey report—A written report with a soil map, describing the areas surveyed, the characteristics and capabilities for use of the soil types and phases shown on the map, and the principal factors responsible for soil development.

Soil type—A soil that, throughout its full extent, has relatively uniform texture in addition to the soil series characteristics.

Sound value—The depreciated value of an improvement.

Sound value estimate—An estimate of the depreciated value of an improvement made directly by comparable condition, desirability and usefulness without first estimating its replacement cost new.

Standard depth (base lot)—The lot depth selected as the norm against which other lots are to be compared, generally the most typical depth.

Statistics—The science of studying numerical data systematically and of presenting the results usefully. Two main branches exist: descriptive statistics and inferential statistics.

Stratify—To divide, for purposes of analysis, a sample of observations into two or more subsets according to some criterion. The criterion is most often, but not necessarily, a threshold value for a single variable. Houses could be stratified on the basis of whether they were brick or frame, more or less than 1,000 square feet and so on.

Sublease—See lease, the lessee in a prior lease becomes a lessor in a sublease.

Substitution, principle of—A valuation principle that states that a prudent purchaser would pay no more for real property than the cost of acquiring an equally desirable substitute on the open market. The Principle of Substitution presumes that the purchaser will consider the alternatives available, that the individual will act rationally or prudently on the basis of the information about those alternatives, and that time is not a significant factor. Substitution may assume the form of the purchase of an existing property, with the same utility, or of acquiring an investment which will produce an income stream of the same size with the same risk involved in the property in question.

Super adequacy—A greater capacity or quality in the structure or one of its components than the prudent purchaser or owner would include or would pay for in the particular type of structure under current market conditions.

Supply and demand, principle of—A valuation principle stating that market value is determined by the interaction of the forces of supply and demand in the appropriate market as of the date of the appraisal.

Surplus productivity; principle of—States the net income remaining after the cost of the agents of production, (land, labor, capital and management) has been paid is considered surplus productivity.

Tangible property—Property that, by its nature, is susceptible to the senses. Generally the land, fixed improvements, furnishings, merchandise, and other items used in carrying on an enterprise.

Template—A transparent plastic instrument calibrated with various sized squares and rectangles (representing 2 acres, 5 acres, 10 acres, 40 acres, etc.) used for measuring acreage on aerial photographs.

Tenancy—The nature of tenure. The holding of property by any form of title. A lease or right to occupy for years; for a definite period, as one year and six months; at will, being ended at any time by landlord; at sufferance, when tenant remains after expiration of the lease; or for life, the right to occupy for one’s life.

Tenancy in common—The holding of property by two or more persons each of whom has an undivided interest which upon their death, passes to their heirs and not to the survivor or survivors.

Tenancy in severalty—An ownership interest in real estate by one owner.

Tier—A row of townships, running east and west, lying between any two consecutive township lines, comprising an area six miles wide.

Tillable land—Land suitable for growing annual crops requiring plowing, harrowing, planting, cultivating and harvesting as distinguished from land on a farm not so adapted, as marsh or swampland and wood lots.

Title—Evidence of ownership, typically in written form. Title passes when a deed is accepted by the grantee.

Topographic map—A map charting natural and manmade features and surface vegetation of an area of the earth’s surface. The map uses contour lines, symbols, tinting, and shading to show these features.

Topography—The relief features or surface configurations of an area, such as hills, valleys, slopes, lakes and rivers. Surface gradations are classified as: compound slope, gently sloping land, hilly land, hogwallows, hummocks, rolling land, steep land, undulating land and very steep land.

Trended historical cost—The use of cost factors (time-location) to bring historical cost to current cost levels.

Unimproved land—Vacant land, a parcel without an improvement value.

Unit cost or price—The price or cost of one item of a quanity of similar items.

Unit-in-place method—A method of cost estimating in which all direct and some of the indirect costs of each individual construction component (such as foundation walls) are specified in appropriate units (such as area, volume, or length), multiplied by an estimate of quantity required by the particular structure, and added to obtain an estimate of the cost of the structure.

Use density—The number of buildings in a particular use per unit of area, such as a density of so many apartment units per acre.

Use value—The actual value of a commodity to a specific owner, as opposed to its value in exchange.

Useful life—The period of time over which the structure may reasonably be expected to perform the function for which it was designed or intended.

Vacancy—An unrented unit of rental property.

Vacant land—Unimproved land; a parcel for which there is no improvement.

Valuation—The process or business of appraising, of making estimates of the value of something. The value typically required to be estimated is market value.

Valuation principles—Economic principles or laws concerning value which are applicable in the valuation of real property. Significant ones include: anticipation, supply and demand, change, substitution, highest and best use, increasing and decreasing returns, competition, contribution, and conformity.

Value—The quantity of one thing that can be obtained in exchange for another; the ratio of exchange of one commodity for another, e.g., one bushel of wheat in terms of a given number of bushels of corn; thus, the value of one thing may be expressed in terms of another. Money is the common denominator by which real property value is usually measured. Value also depends upon the relation of an object to unsatisfied needs; i.e., scarcity of supply and demand. Value is the present worth of future benefits arising out of ownership to typical users or investors.

Warranty deed—A deed conveying to the grantee title to the property free and clear of all encumbrances except those stated in the deed itself.

Water frontage—Land abutting on a body of water.

Woodland—Land that is fairly densely covered with trees.

Zoning—The public regulation of the character and intensity of the use of real estate through employment of police power. This is accomplished by the establishment of districts or areas in each of which uniform restrictions relating to improvements, structure heights, areas, bulk, density of population, and other limitations are imposed upon the use and development of private property.