BRE120 Real Estate Valuation And Assesment

BRE 120 ARU Real Estate Valuation And Assesment Discussion

OVERVIEW

Chapter seven focused on residential construction with the classification of houses and the construction methods and materials. The classification of houses goes into detail about the type of houses. The construction methods and materials go into the foundations and the different categories that go into a property. Chapter eight focuses on The cost approach of value which focuses on an improved property for its value. In this Chapter, we read about how depreciation is estimated, its terminology, and the three causes of depreciation. 

Key Concept from Chapter 7

The key concept I learned about in Chapter Seven was the classification of houses. In order to classify a house four characteristics help with the classification. The four bases are the number of units if the house is detached or attached, the number of stories, and the architectural style (p.215). The difference between attached and detached are the shared walls between different/separate properties. If a property shares a wall with another property that is attached but if they are detached they are not connected with any other property (p.215). This concept helps us understand how houses are described.  

Key Concept from Chapter 7

The concept of construction methods and materials are divided into several categories that help the appraiser describe and know the property. A category we read is “Quality” which is something appraisers keep in knowledge when determining the value of the property. A focus of quality is on cabinetry, countertops, windows, doors, and appliances (etc.) (p.243). We see a table of different details that determine the quality of each category, 

Key Concept from Chapter 8

In the Cost Approach to Value, we read about depreciation as a loss in the value of an improvement (as compared to its cost) due to any reason whatsoever (p.261).  Depreciation has three causes, Physical deterioration, functional obsolescence, and external economic obsolescence (p.263) The physical state that the property is in determines the physical deterioration and can be categorized into curable or incurable. 

SUMMARY

These chapters give us a good understanding of the different categories and approaches that are taken in order to determine the value of a property. We are able to understand the different areas and details appraisals look at as well as the terminology. We also read and go in-depth into the Cost Approach and its steps.