1. Fundamentals of Real Estate Appraisal Thirteenth Edition
William L. Ventolo Jr.
Martha R. Williams, JD
Sam Martin, PhD, DREI, Consulting Editor

2. 1 The Appraisal Profession
Real estate appraiser provides opinion of value of an interest in real property (land and/or buildings) Scope of work determines extent of research and analysis required Opinion of value usually presented in written appraisal report

3. 3 Real Estate and Its Appraisal
Definition of appraisal
The act or process of developing an opinion of value
An opinion or estimate of value for a specific purpose, for a specific person, of a specific property, as of a specific date, based on established facts

4. Real Estate Real estate includes: Water rights Air rights
Land—surface and everything under or on it
Mineral rights
Water rights
Air rights
Fixtures (attachments) to land
Things incidental or appurtenant to land
Anything else considered immovable

5. Tests for Determining a Fixture
Method of attachment
Adaptability of item for land’s ordinary use
Relationship of parties
Intention of person in placing item on land
Agreement of parties

6. Trade Fixtures Trade or chattel fixture
Owned and attached to a rental space or building by a tenant
Used for business purposes

7. Real Property Real property is the same as real estate,
or just the “bundle of rights” of ownership,
depending on the state where the real estate is located
Personal property is everything that is not real property

8. Bundle of Rights
Bundle of rights—the rights of ownership of real estate—including the right to
Use,
Rent,
Sell, or
Give away the real estate
Or not do any of these things

9. Restrictions on Real Estate
Public Restrictions
Taxation
Eminent domain
Escheat
Police power to establish zoning ordinances, building codes, and other measures to protect public health and safety
Private Restrictions
Lien created by financing instrument
Subdivision conditions, covenants, and restrictions (CC&Rs)

10. Legal Description of Land Lot and Block System
Also called lot, block, and tract system and subdivision system
Individual parcels are referred to by tract, block, and lot numbers on a subdivision map
City, county, book, page number, and date the map was recorded are also included in the description

11. Metes and Bounds System
Used primarily in eastern states
Starts at point of beginning
Follows natural or artificial boundaries called bounds for measured distances called metes
May also reference individual monuments or markers

12. Rectangular Survey System
Also called section and township system and U.S. government survey system
Land area divided into townships measured and numbered from intersection of base line (east/west) and principal meridian (north/south)
Township = 36 sections
Section = one square mile = 640 acres

13. Legal Rights and Interests
Freehold estates
Fee simple estate—highest form of ownership
Life estate
Remainderman takes property on termination of life estate or
Reversion returns property to original owner

14. Legal Rights and Interests
Nonfreehold estates
Leasehold estate is owned by
lessee (tenant)
Leased fee estate is owned by
lessor (landlord)

15. Other Interests in Real Estate
Easement
Easement appurtenant runs with the land
Easement in gross does not run with the land
License is a temporary right
Encroachment occurs when improvement extends onto adjoining property

16. Forms of Property Ownership
Individual ownership
Separate ownership or ownership in severalty
Co-ownership
Tenancy in common
Joint tenancy
Marital property
Community property
Tenancy by the entirety
Tenancy in partnership

17. Business and Trust Ownership of Real Estate
Corporation
For profit--owned by shareholders
Nonprofit--owned by members
Limited liability company (LLC)
Trust
Land trust
Living trust
Real estate investment trust (REIT)

18. Special Forms of Ownership
Condominium
Exclusive ownership of specified airspace and
undivided interest in common areas
Cooperative
Owners are shareholders in stock cooperative project, with right to exclusive occupancy of part of property
Planned unit development
Type of development and zoning designation with individually owned parcels and shared common areas