COMMON TERMS

This is often referred to as the absorption rate, absorption is the amount of units or inventory of a specific commercial property type that becomes occupied during a time period in a particular market.

An appraisal is the process of having a property appraised by an appraiser. The appraiser gives their professional opinion of value based on several contributing factors.

APPRAISER
An appraiser is a licensed professional who performs a competent valuation of your property. This is an unbiased opinion based on the property size and market value.

Concessions are lease buyouts, free rent, above-standard tenant improvement allowances, and moving allowances.

COMPARABLES

Comparables is a short term that compares similar properties in your area to whatever property is being appraised, whether that’s a home, commercial property, etc.

Depreciation is a loss in any property value no matter what the cause, usually due to wear and tear of the property or surrounding area.

Forecasting is an estimate an appraiser makes in advance of what your property value will be in the future based on past and current market trends.

FAIR MARKET VALUE

Fair Market Value is the price the seller and the buyer agrees would sell on the open market.

Highest and Best Use is what you can legally use vacant land for or how you can improve a property and also what is physically possible. There are four tests of highest and best use: physical possibility, legal permissibility, maximum productivity, and financially feasible.

Sales Comparison Approach is what an appraiser values your home at by comparing your property to similar properties and the surrounding area.