"Property Appraisal and Assessment Administration" Glossary

Glossary of terms from "Property Appraisal and Assessment Administration".

72 flashcards · Economics · by Tybogy

1. The value of a number or expression regardless of its sign. For example, 3 and -3 (minus 3) both have an X of 3. The mathematical symbol for X is one vertical bar on each side of the number in question, |3|.

   Absolute Value

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

   Abstract

3. A method used to estimate the value of property from a knowledge of normal net income, discount rate, remaining economic life of the property, value of the building, and income path attributable to the land. The method estimates total value by discounting the income stream attributable to the land and adding the result to an independent estimate of the value of the building. Also called land residual technique.

   Abstraction method

4. The amount of depreciation, from any and all sources, that affects the value of the property in question.

   Accrued depreciation

5. A computerized procedure using properties for 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.

   Adaptive estimation procedure

6. A model in which the dependent variable is estimated by multiplying each independent variable by its coefficient and adding each product to a constant.

   Additive model

7. (1) In a computer file, a specific juncture of circuits in computer machinery at which information is stored in the form of magnetic polarities. (2) Also, the name a programmer uses to refer to such a juncture. In a file of human-readable information, one must establish rules about whether and how to record various relevant addresses, including the situs address, owner's address, and mortgagee's address.

   Address

8. The sale price that results from adjustments made to the stated sale price to account for the effects of time, personal property, financing, or the like.

   Adjusted sale price

9. Modifications in the reported value of a variable, such as sale price or gross income, such that the X can be used to estimate market value; in the sales comparison approach, for example, by X for differences between comparables and subject properties.

   Adjustments

10. A tax levied in proportion to the value of the thing(s) being taxed. Exclusive of exemptions, use-value assessment laws, and the like, the property tax is an X tax.

    Ad valorem tax

11. A method of estimating accrued depreciation founded on the premise that, in the aggregate, a neat mathematical function can be used to infer accrued depreciation from the age of a property and its economic life.

    Age/life method

12. The rights to use space above real estate.

    Air rights

13. A precisely defined set of steps that, if followed exactly, will produce a prespecified result.

    Algorithm

14. A method used to value land, in the absence of vacant land sales, by using a typical ratio of land to improvement value. Also called land ratio method.

    Allocation method

15. (1) To consider, for accounting and management purposes, one unusually large investment at a single time as really being a series of smaller expenses over a period of time. (2) To repay a loan, for example, a mortgage, by means of a series of small payments, usually a combination of principal repayment and interest charges, rather than one lump sum at the end of the term.

    Amortize

16. A series of payments (often, but not necessarily, equal) receivable at regular intervals.

    Annuity

17. The principle that value depends on the expectation of benefits to be derived in the future.

    Anticipation

18. A process in which a property owner contests an assessment either informally or formally.

    Appeal

19. An estimation of value.

    Appraisal

20. The date as of which the assessments for a tax year are made. For example, if January 1 is the assessment date and a lot is vacant on that date, the property is appraised and assessed as vacant land even though a building is completed on it in April and the assessment roll may not be final and public until May 15.

    Appraisal date

21. (1) The ratio of the appraised value to an indicator of market value. (2) By extension, an estimated fractional relationship between the appraisals and market values of a group of properties. See also level of appraisal.

    Appraisal ratio

22. The economic concepts underlying appraisal: supply, demand, change, balance, conformity, competition, contribution, anticipation, substitution, highest and best use, surplus productivity, and variable proportions.

    Appraisal principles

23. A ratio study using independent "expert" appraisals as indicators of market value.

    Appraisal ratio study

24. The ratio of the appraised value to the sale price (or adjusted sale price) of a property.

    Appraisal-sale price ratio

25. An estimate of the value of a property before application of any fractional assessment ratio, partial exemption, or other such adjustment.

    Appraised value

26. Increase in value of a property, in terms of money, from all causes. For example, a farm may X if a shopping center is built nearby, and property of any sort may X as a result of inflation.

    Appreciation

27. A sale between two unrelated parties, both seeking to maximize their positions from the transaction.

    Arm's-length sale

28. An ordered arrangement of data such as a listing of sales ratios in order of magnitude.

    Array

29. The monetary amount at which a property is put on the assessment roll. X differ from the assessor's estimate of market value (appraised value) for three major reasons: fractional assessment laws, partial exemptions, and decisions by assessing officials to override market value estimates.

    Assessed value

30. The ratio of the assessed value of a property to an independent appraisal

    Assessment-appraisal ratio

31. The degree to which assessments bear a consistent relationship to market value.

    Assessment equity

32. An appraisal bias such that high-value properties are appraised higher (lower) than low-value properties.

    Assessment progressivity (regressivity)

33. (1) The ratio of the assessed value to an indicator of market value. (2) By extension, an estimated fractional relationship between the assessed values and market values of a group of properties.

    Assessment ratio

34. The reexamination of assessments by a governmental agency that has the authority to alter individual assessment on its own motion.

    Assessment review

35. The basis on which the property tax levy is allocated among the property owners in a jurisdiction with taxing powers. The X usually lists an identifier for each taxable parcel in the jurisdiction, the name of the owner of record, the address of the parcel or the owner, the assessed value of the land, the assessed value of the improvement(s), applicable exemption codes if any, and the total assessed value. Synonyms include cadastre, list, grand list, abstract of ratables, and rendition.

    Assessment roll

36. The 365 days beginning with the appraisal date.

    Assessment year

37. The head of an assessment jurisdiction. X may be either elected or appointed. The term is sometimes used collectively to refer to all administrators of the assessment function.

    Assessor

38. A set of records of the changes made to another set of records.

    Audit trail

39. The arithmetic mean of the absolute deviations of a set of numbers from a measure of central tendency such as the median. Taking absolute values is generally understood without being stated. The average deviation of the numbers 4, 6, and 10 about he median (6) is (2 + 0 + 4)/3, or 2.

    Average deviation

40. The principle that markets tend to move toward equilibrium after a change in one of the determinants of supply or demand.

    Balance

41. A mortgage not fully amortized at maturity and requiring a lump sum or balloon payment

    Balloon mortgage

42. A perspective on (and a technique for estimating) the discount rate. The discount rate is viewed as being composed of two components, each weighted in proportion to typical financing terms for properties of the type in question. For example, if 75 percent loans are available at 9 percent interest and investors are known to seek a 14 percent return on equity, then the discount rate is 10.25 percent, that is, (0.75 x 0.09 = 0.0675) + (0.25 x 14 = 0.0350) = 0.1025 = 10.25 percent.

    Band-of-investment analysis

43. A method of appraising land parcels whereby each parcel to be appraised is compared with a parcel of known value, called the base lot, and differences between the two in terms of location, size, shape, topography, and the like are analyzed by the appraiser in estimating the value of the lot to be appraised.

    Base-lot method

44. (1) A term used in land surveying to mean a known point of reference. (2) In property appraisal, a property of known value, and of known effective age and replacement cost. (3) By extension, a model property to be used in determining by comparison the grade or quality class of other properties.

    Benchmark

45. A method of appraising corner lots whereby each lot is assumed to be two identical lots (one facing each of the streets), which are appraised using appropriate average-unit value rates. The values are summed to get the total value of the lot.

    Bernard rule

46. A statistic is said to be X if the expected value of that statistic is not equal to the population parameter being estimated. A process is said to be X if it produces results that vary systematically with some factor that should be irrelevant. In assessment administration, assessment progressivity (regressivity) is one kind of possible X.

    Bias

47. A variable for which only two values are possible, such as results from a yes-or-no question, for example, Does this building have any fireplaces? Used in models to separate the influence of categorical variables. Also called a dichotomous variable or a dummy variable.

    Binary variables

48. The long edges of two city blocks that adjoin a street for the length of one block.

    Block face

49. A technique used to estimate the value of a property from a knowledge of its net operating income, discount rate, remaining economic life, land value, the income path attributable to the building, and the income path attributable to the land. The technique estimates total value by discounting the income stream attributable to the building and adding the result to an independent estimate of the value of the land.

    Building residual technique

50. Gap financing offered when a construction loan has expired but permanent financing has not yet been found.

    Bullet loan

51. A scale map showing the dimensions of each parcel and related information such as parcel identifier, survey lines, and easements. Annotations on recent sales prices and land value are sometimes added.

    Cadastral map

52. An inventory of the land in an area by ownership, description, and value.

    Cadastre

53. The process of estimating the coefficients in a mass appraisal model.

    Calibration

54. The interaction of buyers and sellers as they buy and sell long-term financial instruments, such as mortgages, bonds, and stocks.

    Capital market

55. The phenomenon whereby one or more events of economic consequence expected to happen in the future exert and economic effect on things in the present. Specifically, the conversion of expected income and rate of return into an estimated value in the income approach to value. Property taxes, anticipated changes, and land-related government services may also be capitalized.

    Capitalization

56. The phenomenon whereby one or more events of economic consequence expected to happen in the future exert and economic effect on things in the present. Specifically, the conversion of expected income and rate of return into an estimated value in the income approach to value. Property taxes, anticipated changes, and land-related government services may also be capitalized.

    Capitalization

57. A method of estimating land value in the absence of comparable sales; applicable to farmland and commercial land leased on a net basis.

    Capitalization of ground rents

58. Any rate used to convert an estimate of income to an estimate of market value; the ratio of net operating income to market value.

    Capitalization rate

59. An indicator of market value that is a refinement over the raw sale price, in that the effects of unusual financing arrangements and extraneous transfers of personal property have been removed.

    Cash-equivalent sale price

60. Amount of money left after subtracting operating expenses and debt service from rents collected. Before-tax cash flow (also called cash throw-off) signifies that income tax effect has not been considered; after-tax cash flow includes income tax savings generated by ownership.

    Cash flow

61. The key part of a computer. Contains circuitry necessary to interpret and execute program instructions.

    Central processing unit (CPU)

62. (1) The tendency of most kinds of data to cluster around some typical or central value, such as the median or mean. (2) By extension, any or all such statistics. Some kinds of data, however, such as the weights of cars and trucks, may cluster about two or more values, and in such circumstances the meaning of central tendency becomes unclear. This may happen in ratio studies when two or more classes of property are combined in a single analysis.

    Central tendency

63. A single point in a range of observations, around which the observations tend to cluster. The three most commonly used measures of central tendency are the mean, median, and mode.

    Central tendency, measure of

64. A time deposit in a bank or savings institution that carries a fixed rate of interest and a penalty for withdrawal before maturity.

    Certificate of deposit

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

    Change

66. An extra digit used for the purpose of performing a check. For example, using X and 0 to indicate divisibility or nondivisibility by 2 would result in the sequence of numbers 1, 2, 3, 4 being represented by 10, 2X, 30, 4X. Computer systems generally have a number of such checks built in to ensure that the machine made no errors in writing or reading data, the data entry clerk did not transpose digits or leave out records, and so on.

    Check digit

67. A particular statistic, and a particular frequency distribution associated with it, of interest in inferential statistics (Chi, a Greek letter, is symbolized by X).

    Chi-square

68. The number of year elapsed since an original structure was built. Synonyms are actual age and historical age.

    Chronological age

69. A predefined category into which data may be put for further analysis. For example, ratios may be grouped into the following classes: less than .500, .500 to .599, .600 to .699, and so forth.

    Class

70. (1) A system intended by law to tax various kinds of property at different effective tax rates. Thus two different kinds of property worth the same amount of money have different tax bills. Although this could be done by applying different tax rates to different kinds of property that share a common assessment ratio, the usual approach is to apply a uniform tax rate to all properties and establish by law what the assessment ratio should be for each class of property. (2) Loosely, by extension,…

    Classified property tax system

71. The act of reducing a description of a unique object, such as a parcel of real estate, to a set of one or more measures or counts of certain of its characteristics, such as square footage, number of bathrooms, and the like. Encoding, a related term, is usually used to refer to the act of translating coded descriptions useful to human beings into a form that can be processed by computers. Coding is sometimes also used to refer the writing of instructions that direct the processing done by comput…

    Coding