At Todd Appraisal, we believe that the essence of our business is the service that we can provide.
*** Johnson County, Kansas tax notices of appraised property value will be mailed March 15th. Appeals must be filed thirty days subsequent to the mailing date. Our appraisers will be standing by to assist with your valuation needs. ***
Often, the difference between making a loan and losing one is the real estate appraiser’s turnaround time. Because of this, we have optimized our service for the best balance of accuracy and thoroughness. At Todd Appraisal, we believe in being Right on Value, Right on Time.
From our initial contact with the homeowner to the property inspection, it is important to Todd Appraisal that our client is represented with the utmost of professionalism with an experienced guiding hand to reassure them throughout the real estate valuation process in as timely and efficient a manner as possible.
Located in Kansas City, Missouri, Todd Appraisal, Inc.’s coverage extends to twelve counties in Kansas, thirty-four in Missouri as well as some coverage in Oklahoma. Our knowledgeable and motivated staff is always available to address any questions or concerns you may have regarding the real estate appraisal process.
It often is the case today that many clients will never meet the homeowners face to face. In those circumstances, the appraiser is the only personal contact that homeowners have and it’s important that the appraiser not only represent themselves well, but reflect positively upon the lender in which they’ve placed their trust. Todd Appraisal considers an appraisal assignment an extension of that trust. From initial contact through the property inspection and report delivery, Todd Appraisal ensures that the client is represented with the utmost professionalism.
We’re always available. Through contact with the office staff to the appraisers in the field to middle of the night orders via our website, we look forward to working with you in the future.
Todd Appraisal will do everything we can to provide you with every real estate appraisal tool you need. Private hard money sales, opinions of value for estate planning or divorce proceedings, jumbo construction loans: our experience at Todd Appraisal will guide you through any real estate valuation process you need. If you require something different please let us know.
Defaults and foreclosures are spiking in many areas of the country, and you may be helping clients navigate through short sales, auctions, creditor negotiations, and more. Properties sold under duress are unfortunately common scenarios in this age.
As an advising professional, you need solid, meticulous documentation that provides an accurate determination of property value in a format that makes sense for you and your clients. You need a professional, experienced appraiser on your side, and we can do that at Todd Appraisal.
A review appraisal has to determine: whether the original appraisal or evaluation is fitting for the transaction, the liability inherent in the transaction, and whether the manner by which the collateral valuation is accomplished guarantees independence and quality. Moreover, they must indicate whether the appraisal is compatible with the letter of engagement, which describes the capacity of the appraisal assignment.
At Todd Appraisal, we provide appraisal review services that are independent, expert, professional and in accordance with the Federal Reserve’s regulations.
Do you need to know if there is sufficient equity in a home to cover the amount of a bond? We can provide a quick turnaround valuation at Todd Appraisal.
A divorce appraisal is in the best interest of both parties when divvying up assets. Whether you intend to sell the property and split the proceeds, or one party will buy out the other’s interest, an unbiased valuation is necessary.
As an experienced professional who understands and respects the sensitive and private nature of a divorce, we are committed to providing you only the most exact, most thorough property appraisals quickly and securely.
Selling your home is one of the most important financial transactions for any family. Some Realtors and sellers are relying on Automated Valuation Models (AVMs) or “free value estimates” to determine a home’s sale price. These computers are located in cities far away and they rely on data gathered from a hodge podge of sources (some shockingly unreliable). They mix the data up and then spit out a “value”. Simply put, relying on that data instead of a professional appraiser can result in disaster.
Perhaps you’ve spent thousands on kitchen renovations, bathroom updates, or invested in new additions that add value to your home. No computer takes these improvements into account.
Realtors, sellers and even home buyers are sometimes in a rush to close on the sale. But a professional appraiser can be your unbiased advocate, telling you what your home is really worth, with careful consideration of all the aspects of your property.
Backed by an unbiased professional appraisal of your specific property, your asking price will have significantly more credibility. Potential buyers will take note, and so will their prospective lenders.
If you’re selling a home, order a real appraisal from Todd Appraisal for a true valuation. We are professional appraisers with years of experience in our respective markets. We know your neighborhood and your housing market. And, we actually come to your home and evaluate the features, the upgrades and specific amenities of your property. No computer can compare.
Many homeowners are getting saddled with higher tax bills. Establishing your home’s true market value by a state-certified appraiser will help you determine if you’re paying too much – and it’s the only way to contest proposed higher taxes.
If your property has been assessed too high, the cost of the appraisal will be minimal compared to the amount of money you’ll save on taxes each year.
This area allows clients to place orders with us electronically, receive e-mail notification when orders are complete and download reports.
Log InBelow are several important Resources that we hope will assist you with your appraisal experience.
Mortgage lenders are part of the primary mortgage market. Primary market lenders include mortgage companies, savings and loans, commercial banks, credit unions, and state and local housing finance agencies.
Once a mortgage is originated, lenders have a choice. They can either hold the mortgage in their own portfolio or they can sell the mortgages to secondary market investors. When lenders sell their mortgages, they replenish their funds so they can turn around and lend more money to homebuyers and owners. The loans that are to be sold are combined into security pools based upon the perceived risk of each loan, then sold by lenders into the secondary market, where mortgages are bought and sold by various investors. Secondary market investors include Fannie Mae and Freddie Mac as well as various pension funds, insurance companies, securities dealers, and other financial institutions.
Government corporations such as Fannie Mae and Freddie Mac operate exclusively in the secondary mortgage market, where they help to ensure that money for mortgages is available to homebuyers in every market. Large institutions such as these help liquidity in two ways. First, cash is paid for mortgages that are purchased from lenders. The lenders in turn can use that money to lend more money to borrowers. Second, they issue Mortgage-Backed Securities (MBS) in exchange for pools of mortgages from lenders. These MBS provide the lenders with a more liquid asset to hold or sell. These MBS investments are highly liquid and are traded on Wall Street through securities dealers, similar to government-backed bonds. One of the largest purchasers of MBS are foreign governments and investors who view the US economy and political systems as the most stable in the world.
When government chartered corporations issue MBS, they insure that investors will receive timely principal and interest payments regardless of what happens to the underlying mortgages. In return for the insurance, these corporations earn a fee. It has been a point of contention as to whether or not the United States Government eventually backs all mortgages purchased and serviced by Fannie Mae, Freddie Mac and Ginnie Mae. According to their charter, the answer is no.
It is because of this risk that appraisers and underwriters were created, and rules pertaining to loans and lending guidelines are enforced. The mortgage industry is one of the pistons in the engine that drives the American economy. Especially in the past few years, appraisers, underwriters and loan officers are the bulwark against economic stagnation. An inordinate increase in fraud, abuse, predatory or under performing loans could easily tip the balance in favor of the regulators and other anti-business forces, ultimately running the possibility of damaging the industry.
Today, it is necessary that all lenders stay aware of fair housing laws and that even the possibility of the perception of discrimination on the part of the lender or appraiser could result in legal action. While most precautions against violations of Fair Housing seem to be common sense, others are surprising — even counter-intuitive. While patently discriminatory words and phrases have been eliminated from all but the most obtuse of mortgage professionals, the courts and the government have steadily expanded the list of offending words and phrases. Some examples of Fair Housing prohibitions include:
Regarding individuals: adults, children, singles, mature persons, or senior citizens should be avoided.
Regarding symbols: anything that might imply or suggest race, color, religion, sex, handicap, familial status, or national origin should be avoided.
Area or location descriptions that could imply discriminatory neighborhood landmarks should be avoided. Names of facilities that cater to a particular racial, national origin or religious group, such as country club or private school designations or names of facilities that are used exclusively by one sex may indicate a preference. Terms that indicate the existence of protected classes within a neighborhood also should be avoided. Mention of drug and alcohol rehab facilities as well as homeless shelters, battered women’s shelters and retirement communities could give the impression of bias and should not be included on an appraisal.
Descriptive terms that could imply bias should also be avoided. For example, stating that the collateral property is within ‘walking distance’ is considered discriminatory against disabled persons. Phrases such as ‘pride of ownership’ and ‘poor maintenance’ in reference to an entire neighborhood could provide an opening for a charge of discriminatory lending practices. Even the mention of easy access to public transportation could be considered discriminatory due to a perception that the poor may be more in need of public transport than the middle class or wealthy.
Concerns with Fair Housing extend beyond the specific verbiage used on an appraisal report. Be aware that pictures, maps or other addenda could also given an appearance of bias. Per FNMA, there should never be people in any of the pictures. This extends to portraits on a mantel or bedside table that may be inadvertently caught on interior photos of a subject property. The exception to this is when a collateral property is under construction and there are construction workers visible. In addition, any religious paraphernalia or indications of a religious preference should be eliminated from mention or from photos. This would include Santa Claus, The Easter Bunny, or St. Valentine’s Day images, or phrases such as Merry Christmas and Happy Easter.
When giving a preliminary review to an appraisal, remember that a good appraisal should be based on demonstrable facts and not presumptions. All aspects of the appraisal should be reasonable and well supported. The comparables used should be relatively self-explanatory as to why they were chosen. Similarly, any adjustments should be adequately explained and supported. Most importantly, the appraisal should not reflect the appraiser’s opinions or personal attitudes towards the subject or general market area in question. Although common sense should be the goal when reviewing or underwriting the methodologies for lending, paranoia may better describe today’s lending environment when concerning Fair Housing.
Appraisal reporting is governed by Standard 2 of USPAP (the standards under which appraisals are written), which states that ‘reporting the results of a real property appraisal [the] appraiser must communicate each analysis, opinion, and conclusion in a manner that is not misleading’. There are two methods of development of an appraisal opinion with three different methodologies or reporting options for each.
The first development process is called the Complete Appraisal. The complete appraisal weighs all three approaches to value when estimating value. The second development process, the Limited Appraisal, is an appraisal that invokes the departure provision by not weighing all three approaches to value.
The first of the reporting options is known as the Self-Contained report. The purpose behind writing a self-contained report is that the user should be able to understand how the appraiser arrived at the value conclusion using the information contained in the report. Typically, selfcontained reports are written in a narrative format, in which all methodologies are explained in detail.
The Summary appraisal report is a synopsis of the logical methods used to reach the value conclusions without including a lot of detail. A summary appraisal report may be a short narrative or one of the typical form reports requested by FNMA or Freddie Mac. It is important that the appraiser summarize the information considered, the appraisal procedures followed and adequately explain the reasoning that supports his/her opinions and value conclusions.
A Restricted appraisal report is the briefest appraisal report that can be prepared under the standards. The restricted report provides little or no information concerning the methodologies and logical processes behind the development of an opinion of value. This report type can only be intended for use by one user, which drastically limits its usefulness.
Most appraisals for single-family properties are limited reports in a summary format. There is little need for the average home to be analyzed for income data. Duplexes and fourplexes are typically appraised using a complete report in a summary report format, meaning that all three approaches to value are considered. It is important that the real estate appraiser state clearly which method and reporting option is being used to derive value in order to avoid misunderstanding or miscommunication.
This section should be in the form of computational data, arranged in sequence, beginning with reproduction or replacement cost and should state the source of all figures used. Typically, appraisers use Marshall and Swift as well as the RS Means costing guides. ENtrepreneur’s profit, as an element of reproduction or replacement cost, must be considered and discussed, and if applicable, should be derived from market data whenever possible. If the appraiser will place considerable weight on this approach to value in reaching a final value estimate, consideration should be given to retaining the services of a contractor or professional cost estimator to assist in developing the reproduction or replacement cost estimate. The dollar amount of depreciation from all causes, including physical deterioration, functional obsolescence and economic, or external, obsolescence shall be explained and deducted from reproduction or replacement cost. The preferred methods of estimating depreciation are the breakdown method and the market extraction method. Even though the cost approach is often the least reliable approach to value, it can be a useful analytical tool in allocating the contributory value of various elements of the property for new constructions. FNMA does not accept appraisals in which the cost approach is the primary means of deriving value. This can be considered to be consistent with the vast majority of secondary mortgage lenders.
The sales comparison approach compares and contrasts the subject property with recent offerings and sales of similar property. THis approach is usually the most appropriate valuation approach used in determining value, and by definition, should result in the most accurate representation of fair market value. The basis of this approach is that by gathering market data on previous transactions where identical assets have changed hands and then applying the previous transactions to the property presently being appraised, the appraiser will best be able to substitute for the subject’s overall appeal to a knowledgeable buying public.
To utilize the market comparison approach, the appraiser compares the subject property to sales and offerings of similar, competitive, comparable properties that a reasonable buying public would consider as a relevant alternative to the subject, if it were for sale. A a careful examination determines the differences between the assets, making appropriate market-based adjustments to compensate for differences. Precision in selecting and describing comparable sales is key to understanding comparability in overall market appeal.
Since any recent and unforced sale of the property under appraisal can be the best evidence of its value, most sales can be treated as comparable sales in this approach to value, providing that they take place within the relevant timeline as defined by the lender. The substituting sale in question shall be analyzed like any other comparable sale and given appropriate weight by the appraiser in concluding a final estimate of value of the property. All comparable sales used should be confirmed by the most accurate information source(s) available. In selecting the comparable sales to be used in valuing a given property, it is fundamental that all sales have the same economic highest and best use as the property under appraisal and that the greatest weight be given to the properties most comparable to the property under consideration.
In developing a final value estimate by the sales comparison approach, the appraiser should explain the comparative weight given to each comparable sale. Each appraisal should contain a sufficient description of the comparable sales used so that it is possible for the intended user to understand the conclusions drawn by the appraiser from the market data. The goal is to provide an understandable product that the lender feels confident using for collateral.
To use the income approach to value, an appraiser treats the property as an investment entity on the basis that the value of an asset is equal to the present value of the future financial benefits that will accrue to the owner of that asset. Certain classes of property have potential earning power that can be forecast, based on previous earnings of similar properties sold to buyers on the open market. THis approach requires similar comparable rental data complete with sales prices for these properties as well as leases and expenses, on which to calculate a projected level of net income.
It should be noted that if the property is actually rented, its current rent is often the best evidence of its economic, or market, rent; and should be given appropriate consideration by the appraiser in estimating the gross economic rent of the property. Likewise, the appraiser should attempt to obtain at least the last three years’ historical income and expense statements for the property. These can generally be developed into a reliable reconstructed operating statement. If this historical income and expense information is available, it should be included in this section or in the appraisal report’s addenda. A mathematical formula is then applied to the rental data to derive a GRM (Gross Rent Multiplier), which is then applied to the subject’s rents (or imputed rents if market data is scarce) to derive value.
absorption rate
Expressed as a percentage, the number of properties that can be bought or sold in a particular market. May be broken down as to types and sizes of properties.
abut
Adjoin or share a common boundary, or share even a small portion of a boundary.
accelerated depreciation
The reduction of the value of a property or chattel as a result of the passing of time. Usually used for tax purposes, the depreciation in the value of a property may be used as a tax deduction. If a property or chattel loses its value quickly, this depreciation rate may be accelerated so that most of the value is lost in the first few years and then the depreciation rate decreases later in the property’s life span. Also known as “Writing down” the value of a property (or a chattel).
acre
An imperial measure for land. Equals 43,500 square feet; 4,047 square meters; or 0.047 hectares.
ad valorem (according to value)
The value of property used in the computation of taxes.
adverse possession
The right of an occupant of land to acquire title against the real owner, where possession has been actual, continuous, hostile, visible, and distinct for the statutory period. The requirements for adversely possessing property vary between states, but usually include continuous and open use for a period of five or more years and/or paying taxes on the property in question.
air rights
A saleable commodity, the right to occupy or use the air space above a specific property.
amenities
A permanent feature of addition to a property that increases attractiveness or value. Examples: decks, porches, fences and patios
appraisal
A determination of the value of something, such as a house, jewelry or livestock
appraised value
An estimate of the present worth
appreciation
An increase in value or worth of property. Opposite of depreciation.
approaches to value
Different methods by which appraisers estimate the value of a property. Include: 1) cost approach, 2) sales comparison approach, and 3) income approach.
appurtenance
A right or entitlement which forms part of the ownership of a property and which passes to a new owner when title passes (i.e. an easement or right of way over another property).
arm’s length transaction
A transaction where none of the parties are related to each other or have common interests. An arms-length transaction is generally at fair market value; in a “non-arm’s length” transaction, the relationship between the parties may cause one or the other to accept less than they are entitled or pay more than fair market value.
as-is
Implied in most Agreements of Purchase and Sale, suggests the Purchaser is accepting the property in its current condition and releases the Vendor from any liability for problems found before or after closing.
asking price
The price placed on property for sale. See list price
assessor
A local government official who determines the value of the property for taxation purposes
below grade
Below the level at which the ground surface meets the foundation of a building
bundle of rights
Ownership in real property implies a group of rights, such as the right of occupancy, use and enjoyment, the right to sell in whole or in part, the right to control the use, the right to bequeath, the right to lease any or all of the rights, the right to the benefits derived by occupancy and use of the property, etc. Fee Simple is the most common bundle of rights held by homeowners.
buyer’s rebate
See sales concession
CC & R’s
Short form for “covenants, conditions, and restriction”, which are the rules of general application governing the relations between landowners in a specific subdivision, development, condominium development of cooperative housing facility. May be registered on title.
census
The official count of the number of people living in a certain area, such as a district, city, county, state, or nation. A census includes information about the respondents sex, age, family, and social and economic status. The reported census tracts on appraisals are how Fannie Mae and Freddie Mac grade redlining risks from each lender.
chain of title
A history of conveyances of a property from some starting point, whereby the present owner derives title. Since January 1st, 2003, USPAP states that each subject property must have three years of reported sales included on each appraisal.
chattel
An article of movable personal property
common areas
Portions of the property and buildings owned by a condominium corporation or planned unit development (PUD) homeowners’ association, or a cooperative development’s association that are available for the use of all unit owners. Also used in rental properties to refer to those facilities for the use of all tenants.
common elements
A common area in a condominium project that is owned by the condominium corporation and for the use of all unit owners
community home buyer’s program
Program established to find creative ways to finance home purchases for people with modest income.
community property
The principle that property accumulated by the joint efforts of a married couple should be considered to be owned by both of them in equal shares, no matter who has legal title to the property.
comparables
Used in assessing or establishing the fair market value of a property, a property which has been sold recently that is similar in size, condition, location and amenities to the subject property.
co-op
See cooperative housing or cooperative sale.
concessions
See sales concessions
condemnation
The act of taking private property for public use. The Fifth Amendment to the United States Constitution allows the government to take private property if the taking is for a public use and the owner is fairly compensated.
condominium
A type of real estate comprising a number of dwellings with individual ownership of separate portions of the building with shared ownership of the common areas.
contingency provision
A provision in a contract stating that some or all of the terms of the contract will be altered or voided by the occurrence of a specific event.
contract for deed
Also known as a Land Contract of Land Installment Contract. Transfer of a property where the title remains in the Vendor’s name until the Purchaser makes the final payment to the Vendor of the Purchase Price.
contributory value
The contribution a particular component has to the value of the whole property
conveyance
A document that provides evidence of transfer of some ownership interest in real property from one person to another
cooperative housing
A form of real estate in which residents own shares but do not directly own the space they inhabit. Typically, shares are proportional to the living areas in each apartment.
cooperative sale
A sale of property in which the buyer is brought to the transaction by a real estate agent who works for a different broker than the listing agent. Both brokers/companies have agreed to cooperate in closing the property.
cost approach to value
A sale of property in which the buyer is brought to the transaction by a real estate agent who works for a different broker than the listing agent. Both brokers/companies have agreed to cooperate in closing the property.
cost to cure
The dollar amount it would take to correct or remedy obsolescence, damage or other inadequacy.
covenant
A restriction on the use of real estate that governs its use. See deed.
decree of foreclosure
An order of the Court setting out the amount outstanding on a delinquent mortgage and ordering the sale of the property to pay the mortgager.
deed restrictions
Deed restrictions cover allowable land uses and home types and sizes within a neighborhood.
default
Non-performance of a duty arising under a contract or otherwise
depreciation
A loss in value
duress
Forcing action or inaction against a person’s will.
easement
A contractual or deeded right to use another person’s real estate for a specified purpose. The most common type of easement is the utility easement.
economic life
The length of time an improvement to real estate can be expected to provide more value than its operating or upkeep costs.
economic obsolescence
Loss of value of real property due to external forces or events. See functional obsolescence.
effective age
An appraisal term for the age of improvements to a property based on an assessment of their current condition (i.e.a well-maintained 100-year-old house could have an effective age of 10 years while a ramshackle, unmaintained 20-year-old house could have an effective age of 50 years). Opposite of “actual age”.
effective gross income
1. For borrowers, the actual amount of money earned from stable sources over a set period (i.e.a month) before taxes and expenses are deducted.
2. For rental properties, the amount of income the property will produce if leased at market value before costs, taxes, upkeep and discounts for vacancy are deducted.
eminent domain
The right of government to take private property for public use. See condemnation.
encroachment
A fixture, or structure, such as a wall or fence, which invades a portion of a property belonging to another. Solutions range from paying the rightful property owner for the use of the property to the court-ordered removal of the structure.
equalization board
Agency with a mandate to ensure fairness in property tax assessments
estimate of value
The appraised value
expropriation
See eminent domain.
exposure
see market exposure
Fair Housing Laws
Federal, state, and local laws, particularly Title VIII of the 1968 Civil Rights Act, Title VI of the Civil Rights Act of 1964, and the Civil Rights Act of 1866, which forbid discrimination because of race, sex, color, religion, or national origin, in the selling or renting of homes or apartments. These laws have recently been expanded to include familial status (up to and possibly including same-sex cohabitation) and disabilities (Americans with Disabilities Act).
fair market value
The value of an item as established by a consideration of how much an independent buyer would pay to an independent seller in a completely free transaction for the item.
Fannie Mae
The Federal National Mortgage Association, which is a congressionally chartered, shareholderowned company that is the nation’s largest supplier of home mortgage funds.
Federal Deposit Insurance Corporation (FDIC)
The Federal Deposit Insurance Corporation’s mission is to maintain the stability of and public confidence in the nation’s financial system. FDIC insurance is offered at almost every US bank and savings and loan. FDIC insures individual accounts in each financial institution for a maximum of $100,000.00 per account. An individual or entity may only be insured for a total of $100,000.00 for all the accounts held in any one institution, or any of its branches.
Federal Emergency Management Agency (FEMA)
FEMA is the government agency that has leadership responsibilities for the Nation’s emergency management system. Once the President has declared a major disaster, FEMA coordinates not only its own and response activities but also those of as many as 28 other Federal agencies that may participate.
Federal Home Loan Mortgage Corporation (FHLMC)
Chartered by Congress in 1970, Freddie Mac is a publicly held corporation that purchases mortgages in the secondary mortgage market. Freddie Mac came into being as the Federal Home Loan Mortgage Corporation (FHLMC) with the mission to increase liquidity for mortgage lending by supplying lenders with the money to make mortgages and packaging he mortgages into marketable securities which are sold to investors.
Federal Housing Administration (FHA)
An agency of the U.S. Department of Housing and Urban Development (HUD). Its main activity is the insuring of residential mortgage loans made by private lenders. The FHA sets standards for construction and underwriting, but does not lend money or plan or construct housing.
fee simple
The greatest possible interest a person can have in real estate.
fee simple estate
An unconditional, unlimited estate of inheritance that represents the largest bundle of rights that can be enjoyed. It is of perpetual duration and only subject to eminent domain.
FHA
Federal Housing Administration
FHLMC
Federal Home Loan Mortgage Corporation.
Financial Institutions Reform, Recover and Enforcement Act of 1989 (FIRREA)
Commonly known as the Savings and Loan Bailout Bill. FIRREA established USPAP as the arbiter of generally accepted standards of appraisal practice. See Uniform Standards of Appraisal Practice.
fixture
Personal property that becomes real property when attached in a permanent manner to real estate
flood insurance
A special and separate type of homeowner’s insurance that provides coverage for damages resulting from flooding. Flood insurance is required by most lenders only if the property is located within a designated flood plain. The cost of the policy is related to the associated flooding risk. Most flood insurance is underwritten by the federal government through FEMA and the National Flood Insurance Program in cooperation with private insurance agencies.
flood plain
Flood plains are, by definition, subject to periodic flooding. They are generally characterized by relatively flat topography and soil types that were laid down during past inundations by flood waters.
foreclosure
The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property.
Freddie Mac
See Federal Home Loan Mortgage Corporation
frost line
The depth to which frost penetrates the earth
functional obsolescence
Loss of value of real property caused by modernization or changing tastes or standards. See economic obsolescence.
gentrification
The process in which a neighborhood is transformed from low-value to high-value properties
Ginnie Mae
See Government National Mortgage Association
Government National Mortgage Association (Ginnie Mae)
A government-owned corporation within the U.S. Department of Housing and Urban Development (HUD). Created by Congress in 1968, GNMA performs the same role as Fannie Mae and Freddie Mac in providing liquidity in the secondary home loan market. The difference is that Ginnie Mae provides funds for government loans (FHA and VA).
GNMA
Government National Mortgage Association
grantee
the person to whom an interest in real property is conveyed
grantor
the person conveying an interest in real property
gross operating income
See operating income and net operating income
ground rent
Portion of rent attributable to the land alone
highest and best use
The particular use of a real property which will produce the greatest financial return.
HOA
homeowner’s association
home inspection
A thorough inspection by a professional that evaluates the structural and mechanical condition of a property. A satisfactory home inspection is often included as a contingency by the purchaser.
homeowners’ association (HOA)
An organization comprising neighbors concerned with managing the common areas of a subdivision or condominium complex. These associations account for issues such as maintaining common land and recreation areas and collecting dues from residents. The homeowners’ association is also responsible for enforcing any covenants, conditions & restrictions that apply to the property. Payment of dues and participation in the homeowner’s association may be either voluntary or mandatory, depending on the neighborhood. See Planned Unit Development.
Housing and Urban Development, Department of (HUD)
The U.S. Department of Housing and Urban Development. This is the agency responsible for enforcing the federal Fair Housing Act.
HUD
Housing and Urban Development
improved land
Also known as “developed land”. Opposite of “raw or vacant land”. Land that someone has, by dint of their labor, taken out of the state of nature.
improvements
Things added to vacant land with the view to increasing its usefulness and value, such as buildings, parking areas, drainage works, etc.
income approach
An estimate of value based on the monetary returns that a property can be expected to generate; capitalization. One of the three approaches to value.
incurable depreciation
The presence of a defect in an asset (i.e. a building) that is too costly to fix.
key lot
A piece of property which is pivotal to the success of a proposed development.
land lease
A rental agreement for the use of land but not the improvements thereon
landlord
The owner of any real estate, such as a house, apartment building, or land, that is leased or rented to another person. See tenant.
latent defects
Problems with a property or building which are not visible to the casual observer, but which may surface later. A vendor must disclose to a purchaser any serious latent defects of which he has knowledge.
lease option
A contract in which an owner leases his house to a tenant for a specific monthly rent, giving the tenant the right to buy the house at the end of the lease period for a price established in advance.
lease purchase
A contract in which an owner leases his house to a tenant for an increased monthly rent, and which gives the tenant the right to buy the house at the end of the lease period for a price established in advance, with the incremental rent increase being used to form a downpayment.
leasehold estate
A form of real estate in which a tenant is allowed to construct permanent structures upon a parcel of leased land, and derive some use or income from said structures during the period of the lease. Leasehold estates usually involved long-term leases, ranging from 20 to 99 years. Landowners are able to have their property developed with no out of pocket expenses.
legal description
A description of a specific parcel of real estate that is acceptable to the courts in that state.
lessee
Tenant leasing property
lessor
One who leases property to a tenant.
lien
A monetary claim against a property
lis pendens
A notice indicating that legal action is pending on a property.
list price
The price placed on property for sale. See asking price
manufactured home
A structure built in a factory, that is later shipped to, and placed on, the homesite.The term can apply to both mobile homes and prefab homes.
market approach to value
An estimate of value based on the actual sales prices of comparable properties. One of the three approaches to value.
market exposure
A term used to describe the presence, through advertising, of a property that is for sale in the marketplace.
market value
The price that a willing buyer and a willing seller, both given full information, and neither under pressure to act, would agree upon. Also known as Fair Market Value.
mechanic’s lien
A legal claim placed on real estate by someone who is owed money for labor, services or supplies contributed to the property for the purpose of improving it. Typical lien claimants are general contractors, subcontractors and suppliers of building materials.
metes and bounds
An older way of describing land in registered instruments. Starting at a recognizable point (the meeting of two roads, the corner of a lot), the description then describes the boundaries of the land by indicating distances and directions for each boundary (i.e. “South 100 feet” or “South 73 degrees, five minutes west for a distance of 100 feet”), returning at the end of the description to the beginning point.
mixed use commercial project
A development which is designed to mix two or more “uses” of land together (i.e. a shopping center which offers office space for dentists, etc.)
MLS
Multiple Listing Service
mobile home
A type of manufactured home that is transported to the home site using wheels attached to the structure. A one piece home is called a “single-wide”, while a house that is jointed together from two halves is called a “double-wide”. Recently, “triple-wides’ have appeared, and become the largest mobile homes available.
model home
A dwelling built first by a developer to allow potential purchasers to see what the finished product will look like once the other homes in the development are completed.
mud pit
An open pit dug in the ground to hold drilling fluid or waste materials discarded after the treatment of drilling mud.
multi dwelling units
Properties that provide separate housing units for more than one family, although they secure only a single mortgage.
Multiple Listing Service (MLS)
A system by which a number of real estate firms share information about homes that are for sale. Membership usually provides a monthly book and/or computer service that provides Realtors with detailed listings of most homes currently on the market.
net operating income
The income from a property or business left over after the costs of operating the property of business have been paid.
non-conforming use
The occupation and use of a property in a fashion which is contrary to the zoning regulations for the property. A Legal Non-conforming Use is one where the non-conforming use predates the zoning by-law such that, as long as it is continued, it is legal.
nuisance
Something that interferes with the use of property by being irritating, offensive, obstructive or dangerous
occupancy permit
Issued by local building departments, permission to enter and occupy a newly built or renovated dwelling after an inspection has established that there are not potential threats to the safety of occupants.
occupancy rate
The percentage of available rental space that is actually rented and in use in a given building or community
obsolescence
A loss in value of real property caused by changes either internal or external to the property. See economic obsolescence, functional obsolescence, and physical deterioration.
off-site costs
Expenditures for facilities required by a particular development but located elsewhere (such as streets, schools, sewers and waste disposal facilities).
off-site improvements
Facilities which are required for the use and development of a particular property but which are located elsewhere.
off-street parking
Spaces for cars which are located on private property rather than on public streets. Local bylaws may require that any new commercial, residential or retail development provide a certain number of parking spaces as part of the development.
offer
A proposal to enter into an agreement with another person. An offer must express the intent of the person making the offer to form a contract, must contain some essential terms–including the price and subject matter of the contract–and must be communicated by the person making the offer. A legally valid acceptance of the offer will create a binding contract.
Office of Interstate Land Sales Registration
A HUD agency which has the responsibility for enforcing the Interstate Land Sales Full Disclosure Act.
operating income
The total income derived from an income producing property. See net operating income and effective gross income
ordinance
A law adopted by a town or city council, county board of supervisors or other municipal governing board. Typically, local governments issue ordinances establishing zoning and parking rules and regulating noise, garbage removal, and the operation of parks and other areas that affect people who live or do business within the locality’s borders.
outbuilding
A structure that is not a part of the main building but is necessary to the full enjoyment of the property (i.e. a shed, garage, etc).
parcel
piece of land
partial taking
Where a government body takes only a portion of a landowner’s land or rights to land by condemnation.
patio home
A single-family home that sits on a small lot, often with one outside wall of the structure sitting on the property line.
personal property
Property which is tangible, movable, and not fixed to the land. Also called chattel and personality. See real property.
physical deterioration
The loss of value to real property from all causes due to the action of the elements and old age. Physical deterioration can be either curable or incurable.
planned unit development (PUD)
In a PUD, the planned unit development association owns and maintains property in a real property development project for the benefit of its members, who are owners of individual parcels of real property in the development and are members of the association because of that ownership. The definition of a PUD has been expanding and now includes HOA’s with the power to levy liens against properties for nonpayment of dues. See homeowner’s association.
planning commission
An appointed board which conducts hearings to consider applications for minor variances of planning ordinance. Also known as “Planning Board, “Zoning Board”, etc.
plat book
A record of recorded subdivisions of land
prefabricated
Descriptive term for a building that is constructed on site from components (walls, floors, roof, etc.) built off-site (in a factory, for example).
pre-foreclosure sale
The sale of a property by a delinquent borrower under an agreement with the lender. The sale may not produce enough proceeds to pay out the loan but the lender will save the costs of foreclosing and selling.
principle of conformity
An appraisal principle which holds that the maximum value is realized when a reasonable degree of homogeneity (sameness) exists in a neighborhood.
property taxes
Taxes that are paid yearly on real property. Property taxes are ad valorem, based on the assessed value of the real property.
public housing
Accommodation offered by the government to low income people for nominal rents.
PUD
planned unit development
purchase offer
A document that lists the price, terms and conditions under which a buyer is willing to purchase a property.
R value
A method of measuring the insulation capabilities of materials.
Radon
A naturally-occurring radioactive gas which may cause health problems for occupants of some buildings.
real estate
Refers to land and improvements and the rights to own or use them.
Real Estate Appraiser
a person licensed to legally appraise real estate property for a fee
real property
Refers to the right to own land and improvements.
realty
Refers to land and buildings and other improvements from a physical standpoint.
redlining
The illegal practice of refusing to originate mortgage loans, or limiting their number, in certain neighborhoods on the basis of racial or ethnic composition
rent control
Government initiative to control raises in the amount charged for the lease by tenants of residential premises.
restrictions
Limitations on the use of occupancy of real estate contained in a deed or in local ordinances pertaining to land use.
running with the land
A phrase used in property law to describe a right or duty that remains with a piece of property no matter who owns it.
sales comparison approach
see market approach to value
sales concession
Consideration returned by the seller to the buyer as part of the selling agreement. Usually, a concession is used to decrease a prospective buyer’s closing costs.
secondary mortgage market
Buying and selling of existing mortgage loans, designed to provide additional liquidity for lenders. Contrast with primary mortgage market. Also see Fannie Mae, Freddie Mac, and Ginnie Mae.
section 8
see public housing
seller carry-back
An agreement in which the owner of a property provides financing, often in combination with an assumable mortgage.
setback
The distance a building must be set back from the property lines in accordance with local zoning ordinances or deed restrictions.
single-family home
A free-standing, residential structure, designed to accommodate one family.
slush pit
see mud pit
soft market
Also known as “buyer’s market”, when sellers far outnumber buyers and prices fall.
spec house
A new dwelling that is being built or has been completed by a builder before a purchaser has been found to buy it.
special assessment
The levying of an additional tax on a property for a specific purpose (i.e. to apportion the cost of infrastructure upgrades among area landowners)
special use permit
A temporary exemption from zoning use by-laws or ordinances.
squatter’s rights
The legal rights to occupy a property which accrue to a person as a result of their long-time, open, notorious and adverse possession of it.
straw man
A slang term for a trustee who purchases property on behalf of another who wishes to remain anonymous
subdivision
A housing development that is created by dividing a tract of land into individual lots for sale or lease
substitution, principle of
The principle which states that a buyer will pay no more for a property than the cost of an equally desirable alternative property.
subject property
A term used to identify the property being dealt with, examined or considered, as distinguished from other properties.
Superadequacy
A feature of a property which may not be recognized fully in the price of the property.
survey
A drawing or map showing the precise legal boundaries of a property, the location of improvements, easements, rights of way, encroachments, and other physical features.
sweat equity
Contribution to the construction of rehabilitation of a property in the form of labor or services rather than cash
taking
See eminent domain
tax foreclosure
The process leading up to the sale of a property to pay for arrears in taxes
tax lien
A claim registered against a property by a government authority for non-payment of assessed taxes.
timeshare
An arrangement under which a purchaser receives an interest in real property and the right to use an accommodation or amenities, or both, for a specified period and on a recurring basis. Used primarily for selling vacation properties.
title
The right of ownership of a property
townhouse
A dwelling unit usually with two, three, or four floors, and shared structural walls.
triple-net lease
A rental agreement which requires the tenant to pay all operating costs of the building.
underwriting
The process of verifying data and approving a loan.
unlawful detainer
An eviction lawsuit
up rent potential
An estimate of the amount rent on a property may be reasonably raised over a period of time.
urea formaldehyde foam insulation
A form of residential and commercial insulation popular in the 1970’s which was found to give off toxic gases. Properties insulated with UFFI sell for much less than similar, non-UFFI properties as a result of the fear of health problems. In many jurisdictions, the Vendor of a residential property must inform a prospective purchaser of the presence of UFFI or provide a warranty that there is no UFFI in the property.
use
Term for the purpose for which a property is occupied, mostly related to zoning by-laws or ordinances. Some typical uses would be residential, commercial, industrial, etc.
useful life
An estimation of the period of time over which a property, building or other asset will be of value or use to the market. See highest and best use.
Uniform Standards of Appraisal Practice (USPAP)
Title XI of the Financial Institutions Reform, Recover and Enforcement Act of 1989 (FIRREA), commonly known as the Savings and Loan Bailout Bill, requires the Federal Reserve Board and other federal agencies to issue regulations to protect federal financial and public policy interests in real estate transactions requiring the services of an appraiser. Federal law, in Title XI, recognized USPAP as the generally accepted standards of appraisal practice and identified the Appraisal Standard Board of the Appraisal Foundation as the authority of promulgation of these standards.
utilities
Services, such as gas, electricity, water, sewers, which are required in any dwelling and for which the owner must pay separately. In some jurisdictions, arrears in payment of charges for utilities may form a lien on the property.
USPAP
Uniform Standards of Appraisal Practice
VA
Veterans Administration
vacancy rate
The calculation of the percentage of all available rental units in a particular area that are not occupied.
valuation
The estimation of the worth or sale price of an asset. The calculation of the percentage of all available rental units in a particular area that are not occupied.
variance
An exception to a zoning ordinance, usually granted by a local government
Veteran’s Administration
The VA is a federal agency which guarantees loans made to qualified veterans on approved property.
view ordinance
A law adopted by some cities or towns with desirable vistas–such as those in the mountains or overlooking the ocean –that protects a property owner from having his or her view obstructed by growing trees. View ordinances don’t cover buildings or other structures that may block views.
work order
A requirement by a local government body for work to be performed on a property so as to bring it into conformance with local regulations.
zero lot line
A term generally used to describe the positioning of a structure on a lot so that one side rests directly on the lot’s boundary line (no set back).
zoning
Exercise of police power of city in regulating and controlling the character or use of property.
Zoning Board
see planning commission
Our coverage area at Todd Appraisal includes a wide swath of counties from Topeka across to St. Louis, and down south as far as Tulsa. Whether you live in the Kansas City urban core or a rural town in eastern Kansas, give us a call.
Major areas include: Kansas City, Columbia/Jefferson City, St. Louis, Tulsa, Topeka, Rolla, Springfield, etc. Click on the states below for a complete county coverage listing.
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(816) 822.2424 | P.O. Box 7215, Kansas City, MO 64113