Glossary

Appraisal* - the act or process of developing an opinion of value; an opinion of value; of or pertaining to appraising and related functions, e.g. appraisal practice, appraisal services.
Complete Appraisal: the act or process of developing an opinion of value or an opinion of value developed without invoking the DEPARTURE RULE.

Limited Appraisal: the act or process of developing an opinion of value or an opinion of value developed under and resulting from invoking the DEPARTURE RULE (see the Appraisal Foundation's web site for more information).

Comment: An opinion of value may be expressed as a single point, a range, or as a relationship (e.g., not more than, not less than) to a previous value opinion or established benchmark (e.g., assessed value, collateral value).

If, over the course of one year, ten houses come to market in a specific neighborhood, and nine (90%) of them sell, this would be indicative of a market segment with high demand. Conversely, if only one of the ten sells (10%), this would reflect low demand. We'll assume that the houses were listed by competent brokers, have "typically motivated" sellers, were exposed to the market for a reasonable period of time and have other characteristics of normal, arms-length sales. >

Listing Status:

Active Listing - A property under agreement for marketing by a real estate broker or their agents and available for purchase the open market.

Expired Listing - (or Cancelled, Withdrawn etc.) - any listing where the property was not successfully marketed.

Pending Listing - a property listing where a purchaser has submitted an offer that was accepted by the seller, but the transaction has not yet completed escrow and title has not yet transferred.

Sold Listing - a property listing that has been exposed to the market where an offer to purchase was accepted by the seller and the transaction has completed escrow, the title transferred and sale closed.

Market Strength - the resulting function of supply and demand conditions in the marketplace. A low supply and high demand will produce a stronger market. However, inherent in the activity of a dynamic, free market is some element of risk and a market judged as having a high level of strength is still subject to risk.

Market Value* - the major focus of most real property appraisal assignments. Both economic and legal definitions of market value have been developed and refined. A current economic definition agreed upon by agencies that regulate federal financial institutions in the United States of America is:

The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

1.buyer and seller are typically motivated; 2.both parties are well informed or well advised, and acting in what they consider their best interests; 3.a reasonable time is allowed for exposure in the open market; 4.payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and 5.the price represents the normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

Marketing Time (Days On Market) the number of days it takes to sell a property once it has been listed and submitted to the MLS.

MLS - a group of real estate brokers or Realtors® who combine their listings and make them available to other MLS members in order to cooperatively market the properties.

Realtor® - A Broker-member of the National Association of Realtors®, the largest professional organization in the US. Real estate brokers are licensed by the individual states. Realtor Associates are agent and associate broker employees of Realtors®.

Regional Market - a metropolitan area definable by physical boundaries and common economic identity, and comprised of many sub-markets.

Sub-Market - segments of the larger market such as new residential construction, condominiums, a particular geographic area, or waterfront properties. A sub-market could also be a combination of any or all of these kinds of elements.

Strand™ Index - Patented algorithm that measures the strength of a regional market or sub-market within the region. Based upon changes in supply and demand in the marketplace, this index produces a numerical rating that is an effective barometer of activity in the real estate market.

* Definitions of terms marked with an asterisk* are taken from the 1999 Edition of Uniform Standards of Professional Appraisal Practice (USPAP) and are provided with the gracious permission of the Appraisal Foundation.