A scale map displaying property ownership boundaries and showing the dimensions of each parcel with related information such
as parcel identifier, survey lines, and easements. Annotations on recent sales prices
and land value are sometimes added.
A term commonly used in Europe to denote an official register or inventory of all lands and/or buildings, giving
the area, location, owner, and either the value or estimated gross or net yield of each. Note: This list remains substantially unchanged for a number of years,
except for names of owners, and serves more or less the same purpose as an assessment roll in the United States
Calibration
The process of estimating the coefficients
in a mass appraisal model.
Capital
(1) A stock of wealth. (2) A stock of wealth other than land. (3) A stock of wealth set aside for the production of additional
wealth. (4) The assets of a business, both tangible and intangible. (5) The total equity of the owners in the assets of a business. (6) That portion of the equity
of the owners in the assets of a business concern that represents the money or money's worth invested by the owners with the express intention that it should remain permanently
in the business (preferably "capital stock" if a corporation). Note: This term should not be used without qualification unless it be defined or its meaning made clear
by the context.
Capital Asset Pricing Model
A method for measuring the long-term cost
of capital for a particular stock.
Capital Assets
(1) Long-term assets, intended to be permanent,
used to produce income, for example, machinery, equipment, land, and buildings.
(2) In accounting, the readily convertible or liquid assets, as of a certain date,
of a corporation (for example, cash, merchandise inventories, and accounts receivable)
not intended for sale, consumption, or conversion to cash during normal business
operations.
Capital Structure
(1) The manner in which a firm is financed, that is, the amount and kind of equity and debt that satisfies the need for funds.
(2) The financing mix of debt and equity. Note: Capital structure may be based on
book values or market values.
Capitalization
The phenomenon whereby one or more events of economic consequence expected to happen in the future exert an economic effect
on values, processes, and decisions in the present. Specifically, the conversion of expected income and rate of return into an estimated present value in the income
approach to value. Property taxes, anticipated changes, and land-related government services may also be capitalized. See also yield capitalization.
Capitalization of Ground Rent
Method of estimating land value in the absence of comparable sales; applicable where there is an income stream; for example,
to farmland and commercial land leased on a net basis.
Capitalization of Income Method
Method of estimating accrued depreciation similar to the sales comparison approach except that estimated values (appraisals)
based on the income approach are used instead of comparable sales. Reliability depends
on accurate data and appropriate methods.
Capitalization Rate
Any rate used to convert an estimate of future income to an estimate of market value; the ratio of net operating income
to market value.
Cash Flow Analysis
A study of the anticipated movement of cash into or out of an investment.
Categorical Variable
A variable summarizing more complex qualitative judgments by assigning each to a category or giving each a rating. For example,
quality of construction might be categorized as poor, fair, average, or good, or assigned a rating from 1 to 4. The categories might then be scaled by assigning
a value of 100 percent to the average category and values of 60 percent and 120 percent to the extremes of poor and good.
Caveat Emptor
"Let the buyer beware." A common maxim stating that the buyer purchases at his or her own risk.
Central Tendency
(1) The tendency of most kinds of data to cluster around some typical or central value, such as the mean, median, or mode.
(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.
CERCLA
The Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended by the Superfund Amendment and
Reauthorization Act (SARA) of 1986; authorizes the "superfund" administered by the Environmental Protection Agency (EPA).
Certiorari, Writ of
An order issued by a superior judicial or quasi-judicial body requiring an inferior judicial or quasi-judicial body to
certify to the superior body the records of a case for judicial review.
Chain
A land measure of sixty-six feet or four rods or 100 links.
Chattel
Tangible personal property. See also property and mortgage, chattel.
Check Digit
An extra digit used for the purpose of performing a check. For example, using X and 0 to indicate even divisibility or
non divisibilityby 2 would result in the sequence of numbers 1, 2, 3, 4 being represented as 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.
Chi-Square
A particular statistic, and a particular frequency distribution associated with it, of interest in inferential statistics.
(Chi, a Greek letter, is symbolized by X).
Chronological Age
The number of years elapsed since an original structure was built. Synonyms are actual age and historical age. Contrast with effective
age.
Class
A set of items defined by common characteristics. (1) In property taxation, property classes such as residential, agricultural, and
industrial may be defined. (2) In assessment, building classification systems based on type of building design, quality of construction, or structural type are common.
(3) In statistics, a predefined category into which data may be put for further analysis. For example, ratios may be grouped into the following classes: less than
0.500, 0.500 to 0.599, 0.600 to 0.699, and so forth.
Classical Income Approach
The classical income approach uses the IRV formula (Income = Rate + Value) in order to convert present and future benefits of property ownership into an indication of the property's present value. In its
simplest form, it requires an appraiser to (1) determine net annual income, (2)determine the capitalization rate, and (3) capitalize income into an estimate of
value. See income approach.
Classification
(1) The act of segregating property into two or more classes for the application of different effective tax rates by means
of one or more special property taxes (see tax, special property) or a classified property tax system. For a representative scheme, see property use category. (2)
In a geographic information system, the process of assigning individual pixels of a multi-spectralimage to categories, generally on the basis of spectral reflectance
characteristics.
Closing Costs
Settlement fees and expenses incurred in transferring property ownership that are paid at the real estate closing.
Coding
(1) 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. (2) 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. (3) Coding is sometimes also used to refer to the writing
of instructions that direct the processing done by computers.
Coefficient
(1) In a mathematical expression, a number or letter preceding and multiplying another quantity. For example, in the expression,
5X, 5 is the coefficient of X, and in the expression aY, a is the coefficient of Y. (2) A dimensionless statistic, useful as a measure of change or relationship;
for example, correlation coefficient. See also coefficient of dispersion and coefficient of variation.
Coefficient of Concentration
The percentage of observations falling within a specified percentage (say, 15 percent) of a measure of central tendency.
Coefficient of Determination (R2)
A statistic that characterizes two or more sets of numbers. The coefficient of determination, when multiplied by 100,
gives the percentage strength of the (linear) relationship between or among the
sets of numbers. (See also correlation.) For two variables, the coefficient of determination
and the square of the correlation coefficient are identical; for three or more variables,
the coefficient of determination measures the strength of the relationship between
the dependent variable and all the independent variables combined.
Coefficient of Dispersion (COD)
The average deviation of a group of numbers from the median expressed as a percentage of the median. In ratio studies, the average
percentage deviation from the median ratio.
Coefficient of Variation (COV)
A standard statistical measure of the relative dispersion of the sample data about the mean of the data; the standard
deviation expressed as a percentage of the mean.
Commercial Property
Generally any nonindustrial, nonresidential realty of a commercial enterprise. Includes realty used as a retail or wholesale
establishment, retail establishment with living quarters, office building, hotel or motel, gasoline service station, commercial garage, parking lot, warehouse, theater,
bank, clinic, nursing home, proprietary school, and the like.
Common Area
The total area within a property that is not designed for rental or sale, which is available for common use by all tenants
and owners. See also undivided interest.
Comparable Match
This concept involves the development of value based on analysis of similar (but not identical) properties using some
measure of utility (such as size or capacity) as the basis of comparison. For example, when appraising an engine lathe manufactured by Company A, the appraiser has comparables
of other similar engine lathes of the same size manufactured by Companies B and C. Obviously, Compared to a direct match, this technique becomes more subjective,
which requires additional analysis of the elements of comparison.
Comparable Sales; Comparables
(1) Recently sold properties that are similar in important respects to a property being appraised. The sale price and
the physical, functional, and locational characteristics of each of the properties are Compared to those of the property being appraised in order to arrive at an estimate
of value. (2) By extension, the term "comparables" is sometimes used to refer to properties with rent or income patterns comparable to those of a property being
appraised.
Comparative Unit Method
(1) A method of appraising land parcels in which an average or typical value is estimated for each stratum of land. (2)
A method of estimating replacement cost in which all the direct and indirect costs of a structure (except perhaps architect's fees) are aggregated and specified with
reference to a unit of comparison such as square feet of ground area or floor area, or cubic content. Separate factors are commonly specified for different intervals
of the unit of comparison and for different story heights, and separate schedules are commonly used for different building types and quality classes.
Comparison Factor
A comparison factor is a difference between two properties that influences market value and can be measured. The number of bedrooms
in a single-family residence is a comparison factor.
Comparison Unit
Comparison units express an overall value attributable to a property in terms of the value per unit of measure. The sale price
of a vacant lot, for example, can be expressed as a cost per square foot or cost per front foot. The income produced by a property can also be expressed in comparison
units, such as rent per square foot.
Composite Rate
An overall rate of blended or weighted averages of several rates of return applicable to single investments as represented
by R in the Ellwood formula. See also mortgage-equity analysis.
Compound Interest Table
A graphic presentation that specifies an interest rate and a compounding period and gives six functions of a dollar at
various yearly or monthly intervals-the future worth of $1 after one interval, the
future worth of the $1 deposited at the beginning of each interval, the sinking-fund
factor, the present worth factor, the present worth of $1 per interval, and the
amount to amortize.
Computer (1)
Assisted Mass Appraisal (CAMA)-A system of appraising property, usually only certain types of real property, that incorporates
computer-supported statistical analysis such as multiple regression analysis and adaptive estimation procedure to assist the appraiser in estimating value.
Computer (2)
Assisted Assessment System-A system for assessing real and personal property with the assistance of a computer. A computer
may be used, for example, in the appraisal process, in keeping track of ownership and exemption status, in printing the assessment roll, in coordinating the work
load of real property appraisers and personal property appraisers with respect to the assessment of commercial and industrial properties, and in a number of other
areas.
Condemnation
(1) The exercise of the right of eminent domain to secure legal title to private property required for a public use. (2)
A declaration by a constituted authority to the effect that a structure is unfit for occupancy or dangerous to persons or other property, often accompanied by exercise
of the police power to limit or prohibit occupancy or to require demolition of the structure. Note: The term "expropriation" is also used to convey the first of these
meanings.
Condemnation, Excess
Condemnation of more private property than is actually required for a specific public improvement, with the intention
of selling, leasing, or otherwise using the excess.
Condition
A judgment of the depreciation of an improvement. Note: This is a difficult area of comparison because although the condition of the
subject is known, it is difficult to know the condition of the comparable. Differences in condition may justify variances in selling prices of similar assets. An investigation
of the condition of the comparables should be done, if possible.
Condominium/Condominium Unit
A condominium is a separately owned unit of real property in the same structure with other such units; the unit owners hold
an undivided interest in common elements of the property, such as a lobby, swimming pool, and grounds. See also cooperative.
Confidence Interval
A range of values, calculated from the sample observations, that are believed, with a particular probability, to contain
the true population parameter (mean, median, COD). The confidence interval is not a measure of precision for the sample statistic or point estimate, but a measure
of the precision of the sampling process (see reliability).
Confidence Level
The required degree of confidence in a statistical test or confidence interval; commonly 90, 95, or 99 percent. A 95 percent
confidence interval would mean, for example, that one can be 95 percent confident that the population measure (such as the median or mean appraisal ratio) falls in
the indicated range.
Consignment
(1) A shipment of goods from one person (the consigner) to another (the consignee). (2) (Preferred.) A bailment contract
whereby one party (the consigner) places his or her goods in the possession of a second party (the consignee or factor) for the purpose of sale by the second party.
Consistent Use
The concept that land should not be valued on the basis of one use while the improvements are valued on the basis of another.
Consumption Value
Consumption value expresses the worth of a property in terms of its capacity to produce personal satisfaction for the
owner.
Contingency Table
A table that shows how a dependent variable varies with respect to two independent variables.
Contingent Valuation Method (CV)
In economics, a method of valuing public goods. The CV method uses survey questions to elicit people's preferences for public
goods by finding out what they would be willing to pay for specified improvements in them. The method is thus aimed at eliciting people's willingness to pay, expressed
in dollar amounts.
Continuous Data
Data that can take any value in a given range. They are often based on measurements (for example, lot size). Quantitative
and continuous data can be thought of as synonymous.
Continuous Variable
A variable for which it is conceivable that, given any two observed values, a value lying between them may occur. For example,
temperature and finished living area are continuous variables; quality class and number of fireplaces are not. See also binary variable and discrete variable.
Contour
An imaginary line on the ground, all points of which are at the same elevation above or below a specified reference surface.
Contributory Value
The amount a component of a property contributes to the total market value. For improvements, contributory value must be distinguished
from cost.
Control
(1) A control station. (2) The coordinates of a control station. (3) A collection of control stations. (4) The geometric data
associated with a collection of control stations, such as coordinates, distances,angles, or directions between control stations. It is practically equivalent, in
this sense, to basic control.
Control Sample
Part of a set of data set aside for testing the results of analysis.
Conveyances
Legal documents that transfer ownership
of property. Deeds and wills are examples of conveyances. Compare real estate transfer
documents.
Cooperative
A business entity, usually a corporation, that holds title to realty and that grants rights of occupancy to its shareholders
by means of proprietary leases or similar devices. A cooperatively owned apartment building is legally different from a building consisting of condominium units. See
also condominium and blanket mortgage.
Coordinate System
(1) A system for locating any geographic point by determining its north-south and east-west distance from some known base point. (2) By extension, a system for identifying each assessable parcel of real
estate by means of coordinates, usually by recording the coordinates of the center of each parcel.
Coordinate System, Cartesian
(1) A two-dimensional coordinate system in which the location (coordinates) of a point is expressed as its distances from
two intersecting (usually perpendicular) straight lines, the distance from each line being measured along a straight line parallel to the other line. (2) A three-dimensional
coordinate system with the same features, except that planes rather than lines are the references.
Coordinate System, Geodetic
A coordinate system consisting of an ellipsoid, the equatorial plane of the ellipsoid, and a meridional plane through the polar
axis.
Coordinate System, Grid
A coordinate system on a plane usually based on a map projection. The most common form is a rectangular Cartesian coordinate
system. An example is the State Plane Coordinate System. Polar coordinate systems are also used, for example, in aviation and artillery firing. The advantage of a
grid coordinate system is that plane coordinates may be substituted for geographic coordinates and the computations relating to them may be made by the simple methods
of plane surveying.
Coordinate System, State Plane
(1) One of the plane rectangular coordinate systems for each state in the United States, established by the United States Coast
and Geodetic Survey in 1933 for use in defining locations of geodetic stations in terms of plane-rectangular Cartesian coordinates. State plane coordinate systems
have been established for all fifty states, and within each state there are one or more separate projections of areas known as zones. The boundaries of state plane
coordinate zones are coterminous with county and state boundaries, an administrative advantage in that counties are never required to use more than one state plane coordinate
zone. (2) A mathematical projection of the curved surface of the earth on a flat surface over which a coordinate grid expressed in feet is laid.
Coordinate, Geographic
(1) An inclusive term, used to designate either a geodetic or an astronomic coordinate. (2) The term may also designate one
of a pair of coordinates that specifies the angular distances of a point from a meridian and from the equator.
Copyright
The exclusive right granted by a government for a limited period to an author, composer, designer, or such, or his or her heirs,
legatees, or assigns, to reproduce, publish, and sell copies of an original literary or artistic work.
Corner Influence
(1) The effect of location at, or proximity
to, the intersection of two streets upon the value of a lot or parcel. (2) The increment
of value resulting from such location or proximity; found most often in commercial
properties because of greater ease of entry and exit, accessibility to higher volume
of traffic, and increased show-window and advertising space.
Correlation
A statistical phenomenon (and a technique
for estimating its strength) whereby knowledge of one fact about a thing implies
some knowledge of a second fact about that thing. For example, because the volume
and weight of water are correlated, knowing that a quantity of water is one gallon
also means knowing that its weight is eight and one-third pounds. Linear correlation,
the kind most often encountered, means that an increase in one factor in some proportion
(say, a doubling) changes the other in the same proportion. With curvilinear correlation,
as between the radius and the area of a circle, this is not true, despite the fact
that the correlation may be very strong in the sense that knowledge of one fact
tells you precisely the other fact. These are examples of variables perfectly correlated
or nearly so; more often, correlation is only partial-for example, the correlation
between the age and height of a child. The correlation coefficient gives the strength
of the linear relationship between the two variables.
Correlation Coefficient (r)
A statistic that characterizes two or
more sets of numbers and, when squared and multiplied by 100, gives the percentage
strength of the (linear) relationship between the two sets of numbers. For example,
if the coefficient of correlation between measures of the height and weight of a
group of people were 0.9, then one would deduce that knowing the height of someone
(loosely speaking) would explain (or account for) 81 percent of the weight.
Correlation Matrix
The table of numbers used to display the
correlation coefficients for each pair of variables when three or more variables
are thought to be correlated.
Cost Approach
(1) One of the three approaches to value,
the cost approach is based on the principle of substitution-that a rational, informed
purchaser would pay no more for a property than the cost of building an acceptable
substitute with like utility. The cost approach seeks to determine the replacement
cost new of an improvement less depreciation plus land value. (2) The method of
estimating the value of property by: (a) estimating the cost of construction based
on replacement or reproduction cost new or trended historic cost (often adjusted
by a local multiplier); (b) subtracting depreciation; and, (c) adding the estimated
land value. The land value is most frequently determined by the sales comparison
approach.
Cost Index
An index showing the variations in construction
costs over time; sometimes, by extension, a set of similar numbers showing the relative
costs of construction in different geographic areas.
Cost Schedules
Charts, tables, factors, curves, equations,
and the like intended to help estimate the cost of replacing a structure from a
knowledge of some other factors, such as its quality class and number of square
feet.
Cost to Cure
Estimated cost to correct or replace a
component or defect within a property.
Cost, Depreciated Reproduction
The reproduction cost of a given property,
less the estimated amount of accumulated depreciation on such property. See also
reproduction cost new.
Covenant
A covenant is a promise written into a
legal agreement (such as a deed) that binds the parties to abide by or refrain from
certain acts. A deed restriction is a special kind of covenant.
Cubic Content of Building
The actual cubic space enclosed within
the outer surfaces of the outside or enclosing walls and contained between the outer
surfaces of the roof and six inches below the finished surfaces of the lowest floors.
Synonymous with "cube of building" ; "cubage of building" ; "cubicle content of
building." Note: This is the definition approved by the American Institute of Architects.
The Institute offers the following interpretation: "The above definition requires
the cube of dormers, penthouses, vaults, pits, enclosed porches, and other enclosed
appendages to be included as a part of the cube of the building. It does not include the cube of courts or light shafts, open at the top, or the cube of outside steps,
cornices, parapets, or open porches or loggias." It is recommended, however, that
closed porches and other enclosed appendages of large volume be included only if
they are of a type of construction similar to that main part of the building. In
the case of party walls, floors, and ceilings, measurements should be made to the
center of the wall, floor, or ceiling.
Indicates if a subject property is similar or not similar to other properties in the neighborhood based on prevailing zoning and building regulations.
