An assumption, directly related to a specific assignment, which, if found to be false, could alter the appraiser’s
opinions or conclusions. Extraordinary assumptions presume as fact otherwise uncertain information about physical, legal, or economic
characteristics of the subject property or about conditions external to the property, such as market conditions or trends, or the
integrity of data used in an analysis.
The highest and most complete ownership of real estate permitted by law, the sovereign,
and/or the government. It is said to consist of a bundle of rights, including: ownership, occupancy and use, the power to bequeath
or give away, unlimited duration, the power sell in whole or part, due of process of law, and the power to lease or rent. It is considered
to be absolute ownership unencumbered by any other interest or estate, except for limitations imposed by government or the property
owner himself.
Federal Emergency Management Agency. This is the agency charged with implementing the National Flood Insurance
Program.
Any normally dry land area that is susceptible to being inundated by water from any natural source. This
area is usually low land adjacent to a river, stream, watercourse, ocean, lake or lakebed. A 100 year floodplain does not refer
to an area that is flooded every 100 years but instead it is an area with a 1% or greater chance of being inundated in any given year.
Land areas outside the 100 year floodplain boundary. Areas of minimal flooding impact.
A property value derived by a county assessor in Arizona, which supposedly equals market value, to which various factors (tax
rates and assessment ratios) are applied in order to arrive at a tax amount for that property.
An existing use that
does not conform to current governmental restrictions, usually zoning, but is allowed by right of its existence prior to the creation
of the current restrictions. Issues relating to health and safety are often not grandfathered.
A factor
derived by dividing the selling price of a property by its gross rents, either monthly or annually, which is used as a unit of comparison
to estimate subject value in an appraisal. For example: if a comparable sale sold for $100,000 and its gross monthly rents are $1,000,
its gross rent multiplier, on a monthly basis, would, therefore, be 100 times. On an annual basis, it would be approximately 8.3 times.
The use or uses of a property, chosen from various possible uses, that generates the highest most probable market
price (that is, market value), as limited by various legal, physical, locational, and market considerations, such as: market demand
and supply, the property’s own characteristics, physical and economic feasibility, location, access, utilities, environmental hazards,
“grandfathered” rights, and pertinent legal restrictions. Thus, anything that can affect value can affect highest and best use. Further,
it is a market driven concept and does not take in to consideration non-economic subject property uses, such as: parks, open space,
public schools, libraries, athletic fields, etc., except as they may otherwise impact value. Its focus is upon what the property can
sell for in the marketplace, even if a non-economic use is very desirable. Its focus is upon what is realistic or most likely to occur,
not what may be otherwise desirous.
For example, if it is found that a subject property has 4 potential uses: A, B, C, and D, and that use A generates a most probable market value of $100, use B $90, use C $80, and use D $100, then the highest and best use of this property is both A and D.
that which is contrary to what exists, but is supposed for the purpose of analysis.
Hypothetical conditions assume conditions contrary to known facts about physical, legal, or economic characteristics of the subject
property or about conditions external to the property, such as market conditions or trends, or the integrity of data used in an analysis.