Approaches to Appraisals

Approaches to Appraisals

David Del Priore CopyrightcopyJanuary 2019

Market Data Approach Cost Approach Income Approach Cap Rate Income Approach Gross

Multiplier

Comparable

Pick 3 to 5 Sold and listed

Within 6 months to a year

Within one mile of subject

property

Replacement Reproduction Cost

Square Foot Method (Sq Ft of

the house multiple by value of

area)

Cubic Foot Method

(Warehouses)

Unit in Place Method

(Everything in its place

ceiling fans and so on)

Quantity Survey Method

(Everything down to the

individual nails and bricks)

Capitalization Rate

If the Cap Rate goes

up the value will go

down

If the Cap Rate goes

down the value will go

up

Gross Rent Multiplier

(GRM)

The comparable

sales price divided

by month rent equal

GRM

The subject

property times the

GRM equals subject

property value

CIA= Comparable inferior add

If the comparable property

doesnrsquot have something

your subject property does

you add to the value

Less Depreciation (Subtract

depreciation from estimate)

Potential Gross Income

Minus Vacancy and

Collections equals effective

gross income

Gross Income Multiplier

(GIM)

Comparable sale price

dived by gross annual

income equals GIM

The Subject Property

times the GIM equals

the subject property

value CBS= Comparable better Subtract

If the comparable property

has something your subject

property does not you

subtract from the value

Add Land Value (Add land to

estimate)

Effective gross income minus

operating expense equals Net

Operating Income (NOI)

$191100$1300 Rent =

147 GRM

$1500 Rent 147 =

$220500 Subject property

Sales Prices

Never Adjust the Subject

Property

Value of Subject Property NOIValue gives you cap rate

NOICap Rate gives you

value

Refer to T-Chart

$20000$50000 Gross =

4 GRM

$55000 Rent 4 =

$220000 Subject property

Sales Prices

Del Priore Realty Academy Copyright January 2021

How do I calculatehellip

Number of days for Interest adjustment

Formula Number of days in month ndash day before closing (to count the day of closing) = Total number of

days

For example If the closing date is March 6 what is the number of days for the interest adjustment 26

HOW

March has 31 days Closing is on March 6 31-5= 26

Interest Adjustment

Formula Loan amount x rate= Annual Interest

Annual interest number of days in banking fiscal year (360) =daily rate

Daily rate x number of days= interest adjustment

For example If the loan amount is $55000 the rate is 115 and the closing date is April 15 what is the

interest adjustment on the buyerrsquos new loan when using a 360-day financial calendar year $26354

HOW

$55 000 x 115= $6 325

$6 325360= $175694

$17 5694 x 15= $26354

Private Mortgage Insurance (PMI)

Formula sales price x LTV= Loan Amount

Loan x PMI RATE= annual PMI

Annual PMI 12 (months)= monthly PMI

For example A buyer purchases a home for $210 000 with a 90 LTV The lender has quoted a rate of

065 annually for PMI What is the buyerrsquos monthly PMI obligation $10238

HOW

$210 000 x 90= $189000

$189000 x 065= $1 22850

$12285012= $102375 $10238


Mortgage insurance premium (MIP) upfront

Formula Sales price x LTV = Loan Amount

Loan Amount x UFMIP rate= Answer

For example A buyer is purchasing a $220 000 home with an FHA loan THE LTV is 965 and the

upfront MIP rate is 175 How much MIP will be added to the loan amount $3 716

HOW

$220 000 x 965= $212 300

$212 300 x 175= $371525 (round Up)

$3716

MIP Monthly

Formula SALES PRICE x LTV= Loan Amount

Loan Amount + upfront MIP (found in previous question) = New Loan Amount

New Loan x annual MIP rate= annual MIP

Annual MIP12= Monthly MIP (rounded up to second decimal place)

For example Using the information from the previous question if the annual MIP rate is 135 then

how much MIP will be added to the monthly payment $24302

HOW

$220 000 x 965= $212 300

$212 300 +$3716= $216 01600

$216 016 x 135= $2 916216

$2 91621612= $243018= $24302

Transfer tax

Formula sales price- assumed loan (if any) = Taxable Amount

Taxable Amount100= Answer

Always round up to nearest whole dollar

Rounded answer x $010= Transfer Tax amount

For example If the sales price is $45000 $0 for a new loan and $32 873 loan assumed what is the

transfer tax $1220

HOW

$45000-$32873= $12127

$12 227100= $12127= $122

$122 x 10= $1220


With No loan Assumed

$250000 Sales Price

$225000 New Loan

What is the Transfer Tax $250

$250000-$0= $250000

$250000100= 2500

2500$010=$250

Intangibles Tax


Loan Amount500= Answer


Answer x $150= Intangible Tac

For example If the sales price is $148000 and the loan type is 95 conventional what is the intangibles

tax $42300

HOW

$148000 x 95= $140600

$140 600 500= $28120= $28200

$28200 x 15= $42300

Del Priore Realty Academy Copyright January 2021 of 12

Study Guide

Key Real Estate Terms Land Earthrsquos center (subsurface rights) through the surface amp up

into infinity (air rights) + natural attachments (Fructus

Naturales)

Real Estate Land + Improvements (man-made additions that are attached)

Real Property Real Estate + Ownership Rights (Bundle of Rights)

Bundle of Rights Possession Control Exclusion Peaceful enjoyment

Encumber (lien) amp Disposition (convey)

Personal Property

(Chattels)

Mobile

Fixture Personal Property that becomes Real Property

Trade Fixture Lesseersquos Personal Property for commercial purposes If it

remains after the Lease it becomes the Lessorrsquos through

Accession

Fixture Test (ldquoMARIArdquo) Method Is the item custom (built-in bookshelves) or was the building modified

for the item

Adaptation Permanently or legally (garage door remote belongs to the attached

garage door opener) attached

Relationship to

Parties

The relationship of the person installing to the property

Intentions of

Annexing Party

Did the owner intend permanency

Agreement If there is a contractual agreement the tests no longer matter

Real Estate Characteristics Physical Economic (ldquoSPAMrdquo)

Immobility Scarcity

Non-Homogeneity (ldquoUniquenessrdquo) Performance of Investment (or Fixed

Investment)

Indestructibility Area Preference (Situs)

Modifications (Improvements)

The Economic Life determines the worth of an investment in land amp improvements

Situs is the most important Economic Characteristic

Del Priore Realty Academy Copyright January 2021 Page 2 of 12

Private Ownership Bundle of Rights ldquoPUTEErdquo

Possession Right to occupy amp have ingressegress

Use or Control Improve lease lien exclude others

Transferability Sell gift or Devise (through Last Will amp Testament)

Enjoyment (Peaceful) Without interference of others or Title challenges

Exclusion Keep those without an ownership interest out

External Influences that may Impact the Bundle of Rights

Private Rights (Another

personrsquos)

Easements Encroachments Liens Restrictions

Easement by

Prescription (Can lead to Adverse

Possession-involuntary

transfer of ownership)

bull Actual

bull Hostile

bull Open

bull Notorious

bull Exclusive

bull Continuous for a Statutory period of time

Public Rights

(Government)

Police Power Escheat Eminent Domain amp Taxation

Government Powers (ldquoPETErdquo)

Police Power Zoning building code Master Plan

Police Power= laws that regulate private property use to ensure the publicrsquos safety health

morals amp general well-being

Eminent Domain Land is taken through the process of Condemnation Owner has

the right to ensure it is for the required public use amp gets ldquoJust

Compensationrdquo

Taxation Real Property taxes (Ad Valorem)

Escheat State takes ownership when property has been abandoned or

owner was Intestate (Will doesnrsquot exist)

Easement Creation (ldquoPOPCORNrdquo) Private Grant

On Agreement

Prescription

Condemnation

Operation of Law

Reservation (in the Deed)

Necessity


Forms of Ownership Severalty One individual or Corporation

Tenants in Common 2+ individuals (Co-Ownership) or Corporations Each holds

individual Title amp interests can be unequal Conveyed through

Devise (Last Will amp Testament)

Joint Tenancy Right of Survivorship One Title amp equal interests Must have 4

unities Possession Interest Time amp Title (ldquoPITTrdquo)

Tenancy by the Entirety

(NOT in GA)

Joint Tenancy for Married Couples

Right of Survivorship

Commonalities

Tenants in Common amp Joint Tenancy share Possession

Joint Tenancy amp Tenancy by the Entirety share Right of Survivorship

Community Property

(NOT in GA)

Property acquired by either before marriage or inheritedgifted

during is NOT considered ONLY for spouses Divorce they

become TIC Viewed as equal partners

Condominium Unit + Air Lot (block of air from inside wall to inside wall)= Fee

Simple Common elements=Tenants in Common

Applies to offices amp parking lots

Cooperative Personal Property Buys Corporate shares amp has a proprietary

lease

Timeshare

ldquoResort areasrdquo

Personal Property Interval Ownership in a Membership Plan

(typically 1 week a year) Tenants in Common

Corporation Single entity

General Partnership Full liability amp managing authority

Limited Partnership No management authority Only liable for investment

Limited Liability Co

(ldquoLLCrdquo)

Owner=Member Some protections of a Corporation

Syndication Usually a RE partnership Subject to security laws

Joint Tenancy (ldquoPITTrdquo) All four unities must exist

bull Possession (undivided)

bull Interests (equal)

bull Time (Title acquired at the same time)

bull Title (One regardless of the number of parties)


Agency The Broker is always the Agent of the Principal

Fiduciary Relationship= implies loyalty trust amp confidence

Compensation= does not create an Agency relationship To be eligible for consideration of a

fee you must i) be an actively licensed Agent amp ii) Prove to be the Procuring Cause

Appropriate Licensure is Required for (ldquoBARSALErdquo)

Buy

Appraise

Rent

Sell

Auction

Lease

Exchange

Agentrsquos Duty to a Principal (ldquoPOLANDrdquo)

Performance Skills amp standards to the best of your abilities

Obedience Follow a Principalrsquos orders within the limits of the law

Loyalty Principalrsquos interests must be placed above everyonersquos

including your own

Accountability

(not Accounting)

You must account for all transactional documentation amp funds

Notice amp Disclosure Full disclosure of any matter that may affect the business at

hand Verification from public record is part of this duty

Due Care Exercise care competence amp skill

Principalrsquos Duties to the Agent (ldquoCRIPrdquo)

Compensation Upon performance as established in the Agency agreement

Reimbursement For things outside of the Agency agreement scope (repairs

lawn maintenance)

Indemnification For any loss that is not the Agentrsquos fault

Performance Cooperation amp assistance

Termination of Agency (ldquoREADIESrdquo)

Revocation By Broker Principal may pursue breach if there isnrsquot a

justifiable reason

Expiration Termination date in the Agency agreement

Agreement Mutual Rescission

Death Of Principal or Broker A Salespersonrsquos death will not impact

the Agreement

Incapacity If either party is deemed legally incompetent or declares

bankruptcy

Extinction Destruction of property

Subject of Law Change in law that could make the Agentrsquos tasks illegal

(listing is acquired through Eminent Domain)


Illegal Practices of Federal Fair Housing

Blockbusting (Agents)

Encouraging owners to sell due to a protected classrsquo influx into

the area They must be shown the widest possible variety if

preferences arenrsquot expressed

Steering (Agents)

Limiting a ClientrsquosCustomerrsquos choices based on protected

categories

Redlining (Lenders) Denying a qualified borrower purely on the basis of the

particular neighborhood

Agentrsquos Duty to a Customer (ldquoHADrdquo) (Agency does not exist)

Honesty Provide accurate factual information free of fraud or

misrepresentation

Accountability (not accounting)

Account for and care for monies amp valuables

Due Care Care amp competency

Since the Broker isnrsquot an Agent of the Customer this lacks Performance Obedience Loyalty

amp the higher standard of care

Contracts

Expressed In writing

Implied Verbal agreement

Unilateral One party makes a promise

Bilateral Two parties A promise for a promise

Executory Contract is signed but there are unfulfilled promises

Executed Promises have been fulfilled amp Title has transferred

Valid Legal and binding

Void Illegal amp not binding The contract will not be legally

recognized so it never existed

Voidable

One+ essential elements are missing The injured party is the

only one that can rescind or honor the terms

Fraud Mutual Mistake Innocent Misrepresentation Duress or

Undue Influence It lacks Genuine Assent

Enforceable Legal and binding written contract

Unenforceable Cannot be supported in a court of law Possibly a verbal

agreement


Essential Elements of a Contract (ldquoCOMICrdquo) Competent Parties All parties must be legally competent amp have the authority to

act Grantor must be of legal age

Objective

(Lawful Purpose)

Not intended for illegal purposes Property can be legally

conveyed

Mutual Assent Through the Offer and Acceptance process Both parties must

agree to every single contract detail

In Writing Except for Leases of one year or less all contracts must be in

writing (Statute of Fraud)

Consideration Valuable Consideration or Good Consideration for a Gift Deed

(ldquoLove amp Affection)

Remedies for Breach of Contract Contractual Liquidated damages Mediation or Arbitration

Law Suit for damages

Suit for Specific Performance

Recession (If the Plaintiff was pressured forced

misrepresented or under duress)

Listing Agreements Exclusive Agency One Agency contract for the listing The Broker responsible

for securing a ready willing amp able buyer (ldquoProcuring

Causerdquo) is eligible for the fee However if the Seller is the

Procuring Cause (ldquoFSBOrdquo) payment is not due to anyone

Exclusive Right to Sell

(Most Common)

One Agency contract for the listing Regardless of whorsquos the

Procuring Cause including the Seller the listing Broker is due

a fee

Open Listing non-Exclusive Agency contracts with multiple Brokers The

first to be the Procuring Cause is eligible for the fee However

if the Seller is the Procuring Cause (ldquoFSBOrdquo) payment is not

due to anyone

Net Listing

(Illegal in GA)

Seller dictates a minimum net price (Sales Price-closing costs-

commissions) necessary to consider an offer Any monies

over that net price is considered the Brokerrsquos fee (Commission

could equate to 3 or 60)

Marketing Listings

Multiple Listing Service

(ldquoMLSrdquo)

This is one industry source widely used to share listing

information with other Licensees


Termination of a Leasehold Estate (ldquoDECAFrdquo) Death of Lessee

Eviction of Lessee

Condemnation of Real Property

Agreement (Mutual Rescission)

Foreclosure

Lending Loan Instruments

Promissory Note Evidence of debt used in all Security Instruments

Lien-theory (non-Judicial) States

Mortgage 2 parties Mortgagor (Borrower) amp Mortgagee (Lender)

Title-theory (Judicial) States

Security Deed (used in

GA)

2 parties Grantor (Borrower) amp Grantee (Lender)

Deed of Trust 3 parties Trustor (Borrower) Beneficiary (Lender) amp Trustee

(neutral 3rd party holding Bare Title)

Security Instrument Clauses

Prepayment Penalty Fee based on a of remaining Principal for paying-off the loan

before maturity

Acceleration (ldquoDue on

Defaultrdquo)

For any Contract breach

Alienation (ldquoDue on

Salerdquo)

Title cannot be conveyed or assumed unless the Lender pre-

approves

Defeasance When the loan is paid in full borrower is released from liability

amp gains Legal Title

Also protects Buyer if Lender accepts less than the Principal

balance at Foreclosure

Foreclosure

Judicial (Lien-theory) Strict Foreclosure Sale Must go through the court system

Non-Judicial (Title-

theory) (Georgia)

Power of Sale clause in Security Instrument allows Lender to re-

gain the property without the court process However to do so

they must advertise the property beforehand In GA itrsquos currently

4 weeks

Deed in Lieu of

Foreclosure (ldquoFriendly

Foreclosurerdquo)

Defaulted borrower may willingly surrender Title before

Foreclosure proceedings to minimize credit damage The caveat

being the Lender must be willing to do so

Secondary Mortgage Market Federal National Mortgage Association (ldquoFNMArdquo) Fannie Mae

Federal Home Loan Mortgage Corporation (ldquoFHLMCrdquo) Freddie Mac

Government National Mortgage Association (ldquoGNMArdquo)

Ginnie Mae

GNMA is the only Government agency Purchases low-income loans


Protected Classes Law Existing Category Added Category

Civil Rights Act of 1866 NA Race

Federal Civil Rights Act of

1968

(ldquoFederal Fair Housing

Actrdquo)

Race Color Religion amp National

Origin of Birth

Prohibits discrimination in the Real Estate industry of the protected classes

Fair Housing Act of 1974 Race Color Religion amp

National Origin of Birth

Sex

Fair Housing Act of 1988 Race Color Religion

National Origin of Birth amp

Sex

Familial Status amp

Handicapped (one with a record of mental or

physical impairment to include

alcoholism cancer or AIDS)

Americans with Disabilities

Act (ldquoADArdquo)

Prohibits discrimination based on disability amp allows for

reasonable accommodation or modification(s)

Except for Race a private homeowner who occupies a 1-4-unit property may discriminate if

advertising does not contain discriminatory content (ldquoMs Murphy Lawrdquo)

Fair Housing

(ldquoRealtors Can Really Sell Houses Fast Nowrdquo)

Race

Color

Religion

Sex

Handicap

Familial Status

National Origin

Valuation amp Appraisal Definitions

Appraisal= Unbiased opinion of Market Value by an Appraiser Sets the upper limits of

Value

Appraisal Fee= Based on the amount of work amp time

Market Value= the most probable selling price in an Armrsquos-length Transaction

Market Price= Fact The actual Sales Price

Parties are objective and unrelated with unrelated motivations The 4 requirements of an

Armrsquos-length Transaction are

bull Valuable Consideration (cash) is exchanged

bull Property was on the open market for a reasonable time for the market conditions

bull Parties were under no undue pressure


bull Parties were well-informed amp acting in their own best interests

Appraisal Process Steps

1 Define the problem 4 Analyze data through i) Market Data

Approach ii) Cost Approach or iii) Income

Approach

2 Make preliminary study 5 Reconciliation amp Final Estimate

3 Gather Data 6 Prepare Appraisal Report

Four (4) Necessary Components of Value (ldquoDUSTrdquo)

Demand Actual need or desire + the ability to pay for it Desired by most

Utility More use more Value

Scarcity Short supply relative to demand

Transferability Ability to convey Title with relative ease

Economic Principals of Value (leads to the development of a credible appraisal)

Supply amp Demand Limited inventoryhigh demand= higher Market Price

Highest amp Best Use Legal use that will likely produce greatest net return

1 Legally allowable 2 Physically possible 3 Financially feasible

amp 4 Maximum utility

Substitution Applies to all three (3) approaches Sets the upper limit on Value

Conformity Cookie cutter neighborhoods Property consistency helps Value

Change Economic amp social forces can impact Value more than the

property itself

Development phase growing amp developing

Equilibrium phase growth ends amp value levels off

Decline phase deterioration sets in amp values fall

Progression amp

Regression

Regression Most expensive property loses value because of

lesser homes around it

Progression Least expensive gains value because of nicer homes

around it

Competition If the market is flooded with listings value drops

Increasing amp Decreasing

(Diminishing) Returns

Increasing Returns a dollar spent will add dollars to value

Decreasing Returns a dollar spent will not even return that

dollar in value

Contribution How an improvement adds or detracts from the whole property

Anticipation (Basis of

Income Approach)

Positive or negative impact due to expectation of a future event

(Current value + expected income amp benefits)

Influencing Factors on Value

Situs (location) Or area preference Most important factor

Size amp Shape Of a lot

Depth Tables The front of a lot has more value than the back Ties to Size amp Shape

Soil Characteristics Considered for basements septic systems erosion

Key Lots Irregular lot that may become valuable in Assemblage


Assemblage Process of combining 2+ individual adjoining lots Plottage= resulting

increase in value

Approaches to Value

1 Market Data or Sales Comparison Approach

Value is based on the Principal of Substitution for residential properties amp vacant land

Fair Market Value= SOLD Comparable Properties by Adjusting for Differences

Adjustments

Comps should be

sold within the last 3-

6 months

Preferably within 1

mile of the Subject

NEVER adjust the

subject property

ldquoCIArdquo If Comp is

inferior ADD to the

Comp for that itemrsquos

value

ldquoCBSrdquo If Subject is

better SUBTRACT

from the Comp for

that itemrsquos value

Reconciliation Comp with the fewest adjustments to Subject gets the highest emphasis

(highest percentage) Less reliable in slow or unstable markets

Comparative Market Analysis (ldquoCMArdquo) is used by Licensees to evaluate Fair Market

Value for a listing price or offer 3-5 comparable properties is an acceptable ldquoNrdquo Unlike the

Market Data Approach that uses sold properties a CMA uses sold amp actively listed properties

2 Cost Approach (only method where land is evaluated separately)

Value is based on the Principal of Substitution Used for special purpose amp new construction

It is also used to evaluate Hazard Insurance

Fair Market Value= (Replacement Cost ndash ldquoStraight-Linerdquo or ldquoAge-Liferdquo Depreciation +

Land Value)

Land NEVER depreciates

Reproduction Cost= Cost to produce an

exact replica using a Comparative Unit

Method Olderhistorical buildings

Replacement Cost= Cost using similar

materials to produce a satisfactory substitute

using a Comparative Unit Method Special

purpose amp new buildings

Square Foot Method Single-family homes Measures exterior

dimensions of

Improvement

1 (L W)= Sq Ft

2 (Sq Ft Price per

Sq Ft)= Cost

Cubic Foot Method Warehouses Measures volume of

Improvement

1 (L W H)=

Cubic Feet

2 (Cu Ft Price per

Cu Ft)= Cost

Unit in Place

Method

Used in Hazard Ins Cost of each assembled amp installed

component

Quantity Survey

Method

Best for new

construction

Detailed cost of every

single thing (nails

bricks etc)

Detailed breakdown


Accrued Depreciation

Depreciation= re-capturing the cost of a purchase over a certain time period as allowed by

IRS regulations

Curable= Cure costs less than resulting

value

Incurable= Cure costs exceed the value of

the correction Doesnrsquot make sense

Physical Deterioration= normal wear amp tear exposure to weather lack of proper

maintenance

Functional Obsolescence= obsolete amp doesnrsquot meet current expectations EX outdated floor

plan old systems unorthodox architecture (For test this applies to appliances other than

black white or SS)

Economic Obsolescence= Incurable since external to property amp beyond control EX high

taxes crime unemployment flight patterns factory railroad

Actual Age= Improvementrsquos historical age Effective Age= Condition updates amp utility

that may make it less than Actual Age

Land Value= May be based on a CMA or i) Sq feet ii) front footage or iii) acreage

1 Acreage= (Sq Ft 43560) 2 (Acreage Price per Acre)= Land Value

3 Income or Capitalization Approach

The Appraiser looks at 3 things relative to the propertyrsquos income i) Quantity ii) Quality

(how safe is it) and iii) Durability (how long can the income be sustained)

Cap Rate (ldquoCRrdquo) = Rate of Return on

Investment (ldquoROIrdquo) Direct correlation to CR

amp investment risk Lower the CR the higher

the value

Commercial

Uses net vs gross income amp converts income

into Value

CR Steps

1 (Potential Gross Income ndash Vacancy ndash

Collections) = Effective Gross Income

(ldquoEGIrdquo)

2 (EGI ndash Operating Expenses) = Net

Operating Income (ldquoNOIrdquo)

3 (NOI Price) = CR

4 (NOI CR) = Fair Market Value

1 (100 CR)= Full Capitalization ( of years

it will pay for itself)

4 Capitalization Approach (ldquoGRMrdquo amp ldquoGIMrdquo)

Like the Income Approach the Appraiser looks at 3 things relative to the propertyrsquos income i)

Quantity ii) Quality (how safe is it) and iii) Durability (how long can the income be

sustained)

Gross Rent Multiplier (ldquoGRMrdquo) Residential

rentals 1-4 units

Ratio between price amp annual rental income

before expenses

The lower the GRM the more attractive

investment

GRM Steps

1 (Comp Sold $ monthly rent) = GRM

2 (Subjectrsquos monthly rent GRM) =Fair

Market Value

Gross Income Multiplier (ldquoGIMrdquo) Small

commercial + residential 5+ units

GIM includes annual rent + income from

other sources

GIM Steps

1 (Comp Sold $ Gross annual income) =

GIM

2 (Subject gross annual income GIM) =Fair

Market Value


Appraisal Reports

Letter of Opinion Informal report thatrsquos not recognized or accepted

Short Form Summary of such is the most common format Used by lending

institutions amp Government agencies (Fannie Mae amp Freddie

Mac)

Narrative Report Most encompassing Usually required for appraising

commercial property or legal cases (Condemnation under

Eminent Domain settling Estates in probate etc)

Letrsquos Look at Math Key Formulas

1 Acre= 43560 sq ft Township= 36 Sq Miles

Government Rectangular Survey

Principal Meridian Lines run N-S

Base Lines run E-W

Section= 1 sq mile amp 640 acres

Taxes amp Interest

Transfer Tax = (Sales Price 500) $150 Intangible Tax= (Loan Amount 100) 010

Upfront Mortgage Insurance Premium (ldquoUFMIPrdquo)= 175 (0175)

Closing Calculations

Jan=31 April= 30 June= 30 Sept= 30

Feb= 28 May= 31 July= 31 Oct= 31

March= 31 June = 30 August= 31 Nov= 30 amp Dec= 31

Seller (ldquoSACrdquo) = Seller Accrual Closing

Date (goes to Seller)

Buyer (ldquoBADrdquo) = Buyer Add Days

Interest= Divide annual interest by 360 days

then multiply by the actual calendar days

EX (annual interest 360) actual calendar

days

Taxes= Use 365 days

EXrdquo (annual taxes 365) = Daily Tax


TimeLine Triggers

GA License Law and Georgia Real Estate Commission (ldquoGARECrdquo) Rules amp Regulations

The last revision to this document is notated in the footnotes below

State legislature passes License law whereas under the authority of such GAREC passes Rules amp

Regulations (ldquoRampRrdquo) relating to the professional conduct of Georgia Licensees

License law is designed to protect the public from dishonest or incompetent Agents

Since all the aforementioned are fluid refer to wwwgrecstategaus for all current license law amp

GAREC RampRs

Unless specifically noted below other notification timelines amp time triggers are thirty (30) days This also

includes standard GAREC meetings (whereas the Chairman or Vice Chairman must attend)

Immediately

bull Copies of transactional documents must be given to all signatory parties

bull An executory Purchase amp Sale Agreement must be given to all signatory parties plus all involved

Brokerage firms

bull A Licensee that has a Trust Account(s) and is filing for bankruptcy must notify the GAREC

PromptlyAs Soon as Possible

bull All funds a Licensee receives from a Client or Customer must be placed with hisher Qualifying

Broker or designated Associate Broker

bull A Listing Agent must present all offers amp counteroffers to hisher Brokerrsquos Principal (ldquoSellerrdquo)

bull A Selling Agent must present all offers amp counteroffers to hisher Brokerrsquos Principal (ldquoBuyerrdquo)

One (1) Business Day

bull If a Broker comes into possession of anotherrsquos funds and does not have an existing Trust

Account they must open one

Ten (10) Days

bull Removing the Brokerrsquos ldquoFor Salerdquo sign from a former Clientrsquos yard after a successful closing or

listing expiration

bull Must notify GAREC (regardless of whether the Licensee is found innocent or guilty) (i) after an

administrative civil or criminal court action or (ii) a final court disposition All court

documentation must be included in the notification This is the only exception to the thirty (30)

day notification rules

bull A Fidelity Bond (required for a Broker hired to provide Community Association Management

services amp handles $60000+ at any one time) must have a minimum of ten (10) days cancellation

notice from the insurance company for non-payment

Sixty (60) Days

bull Candidates must submit a certified criminal history report (a GCIC Background Check can be

obtained for a fee from your local Sheriffrsquos Department) with a new license application At the

time of submission the report cannot be sixty-one (61) days old

bull Applicants must appeal a GREC notice of rejection within


bull Licensees must appeal a GAREC notice of license revocation within

bull GAREC must respond to a Petition for Declaration ruling on the applicability of a License law(s)

or Rule(s) relating to a particular situation within (this does not apply if GAREC refers the matter

to the Attorney General)

bull If a partnershiprsquos limited liability company (ldquoLLCrdquo) or corporationrsquos (think a Brokerage firm)

Qualifying Broker either (i) dies (ii) resigns or (iii) is fired the firm has sixty (60) days to

secure a new replacement

During the candidate search a Partner (in a partnership) Member (in an LLC) or Officer (in a

corporation) are charged to sign documents amp disburse Trust Account funds

Ninety (90) DaysThree (3) Months

bull The time from passing the State exam that new Salespeople amp Community Association Managers

must file a GAREC application to avoid doubled fees

bull A Fidelity Bond (required for Brokerrsquos with Community Association Management duties that are

responsible for $60000+ in funds at any time) must cover the total of three (3) months of total

assessments due from the owners

Six (6) Months

bull If a new Licensee has enrolled and paid for the mandatory twenty-five (25) hour post-license

coarse within the first twelve (12) months of licensure heshe may request a six (6) month

extension if it has not been completed

One (1) Year

bull From the date of passing the State exam the GAREC application must be filed

bull It is optimal for new Salespeople amp Community Association Managers to file within ninety (90)

days since fees double on day ninety-one (91)

bull Brokerrsquos amp Associate Brokers are not penalized as long as it is done within the first twelve (12)

months

bull If a Listing Agent fails to put an expiration date in a Purchase amp Sale Agreement (Effective amp

Expiration dates are mandated) the expiration date defaults to one (1) year from the Effective

Date

bull

Two (2) Years

bull If an Applicant has a felony conviction or crime of moral turpitude record heshe will not be

eligible for consideration until two (2) years after successful completion of their sentence

bull A civilian must file a court action within two (2) years to be eligible to pursue reimbursement

under the Education Research amp Recovery Fund (ldquoFundrdquo)

Three (3) Years

bull Brokers must keep all transactional records including but not limited to contracts bank

statements amp Trust Account(s) (every deposit amp disbursement from such) record

Four (4) Years


bull License renewals must be completed every four (4) years on the last day of the Licenseersquos birth

month

Five (5) Years

bull Each of the six (6) GAREC members serve staggered five (5) year terms

bull An Applicant with a history of multiple convictions is not eligible for licensure consideration

until five (5) years after their successful sentence completion

bull A Licenseersquos records (including any disciplinary actions) are maintained for five (5) years

Anyone can access them through written request

Ten (10) Years

bull An applicant for a Brokerrsquos or Broker Associatersquos license is not eligible for licensure

consideration until ten (10) years after a conviction sentence or incarceration release

bull Once GARECrsquos Fund has reimbursed a consumer due to a Licenseersquos actions andor negligence

that Licenseersquos revoked license cannot be re-instated until (i) heshe has repaid the Fund with

interest and (ii) ten (10) years has passed since payment

Fifteen (15) Years

bull Applicant records are maintained for

bull Miscellaneous written requests are maintained for

Twenty (20) Years

bull Upon request a retiring Licensee that has maintained hisher license on active status for twenty

(20) years may keep their license certificate (the family of a deceased Licensee may request the

same)

Forty (40) Years

bull GAREC will maintain information regarding Licenseersquos whose license has been suspended or

revoked It is published on their domain website

An example is when the Fund pays for damages pertaining to a Licensee

Miscellaneous

An Affiliate (a Licensee ldquoGeneral Agentrdquo) must gain prior written permission from hisher Qualifying

Broker for everything except

bull Transactions where the Licensee is the Principal Prior written notification not permission is the

only requirement


Estimate of Cost to Buyer (GAR F840)

Estimate of Net to Seller (GAR F837)

Real Estate Calculations

Study Guides

Timeline Triggers for GA License Law


How do I calculatehellip

Number of days for Interest adjustment

Formula Number of days in month ndash day before closing (to count the day of closing) = Total number of

days

For example If the closing date is March 6 what is the number of days for the interest adjustment 26

HOW

March has 31 days Closing is on March 6 31-5= 26

Interest Adjustment

Formula Loan amount x rate= Annual Interest

Annual interest number of days in banking fiscal year (360) =daily rate

Daily rate x number of days= interest adjustment

For example If the loan amount is $55000 the rate is 115 and the closing date is April 15 what is the

interest adjustment on the buyerrsquos new loan when using a 360-day financial calendar year $26354

HOW

$55 000 x 115= $6 325

$6 325360= $175694

$17 5694 x 15= $26354

Private Mortgage Insurance (PMI)


Loan x PMI RATE= annual PMI

Annual PMI 12 (months)= monthly PMI

For example A buyer purchases a home for $210 000 with a 90 LTV The lender has quoted a rate of

065 annually for PMI What is the buyerrsquos monthly PMI obligation $10238

HOW

$210 000 x 90= $189000

$189000 x 065= $1 22850

$12285012= $102375 $10238







HOW

$220 000 x 965= $212 300

$212 300 x 175= $371525 (round Up)

$3716

MIP Monthly







HOW

$220 000 x 965= $212 300

$212 300 +$3716= $216 01600

$216 016 x 135= $2 916216

$2 91621612= $243018= $24302

Transfer tax






transfer tax $1220

HOW

$45000-$32873= $12127

$12 227100= $12127= $122

$122 x 10= $1220



$250000 Sales Price

$225000 New Loan


$250000-$0= $250000

$250000100= 2500

2500$010=$250

Intangibles Tax






tax $42300

HOW

$148000 x 95= $140600

$140 600 500= $28120= $28200

$28200 x 15= $42300


Study Guide



Naturales)





Personal Property

(Chattels)

Mobile




Accession


for the item



Relationship to

Parties


Intentions of

Annexing Party




Immobility Scarcity


Investment)














personrsquos)


Easement by




bull Actual

bull Hostile

bull Open

bull Notorious

bull Exclusive


Public Rights

(Government)








Compensationrdquo





On Agreement

Prescription

Condemnation

Operation of Law


Necessity









(NOT in GA)



Commonalities



Community Property

(NOT in GA)








lease

Timeshare








(ldquoLLCrdquo)














Buy

Appraise

Rent

Sell

Auction

Lease

Exchange





including your own

Accountability

(not Accounting)








lawn maintenance)





justifiable reason




the Agreement


bankruptcy










Steering (Agents)


categories





misrepresentation






Contracts










Voidable







agreement




Objective

(Lawful Purpose)


conveyed

















(Most Common)



a fee




due to anyone

Net Listing

(Illegal in GA)





Marketing Listings


(ldquoMLSrdquo)





Eviction of Lessee



Foreclosure







GA)






before maturity


Defaultrdquo)



Salerdquo)


approves





Foreclosure



theory) (Georgia)




4 weeks

Deed in Lieu of


Foreclosurerdquo)







Ginnie Mae






1968


Actrdquo)


Origin of Birth




Sex



Sex

Familial Status amp





Act (ldquoADArdquo)





Fair Housing


Race

Color

Religion

Sex

Handicap

Familial Status

National Origin



Value














Approach
















property itself




Progression amp

Regression




around it






dollar in value



Income Approach)











increase in value

Approaches to Value




Adjustments

Comps should be


6 months

Preferably within 1

mile of the Subject

NEVER adjust the

subject property


inferior ADD to the


value


better SUBTRACT

from the Comp for











Land Value)










dimensions of

Improvement

1 (L W)= Sq Ft

2 (Sq Ft Price per

Sq Ft)= Cost


Improvement

1 (L W H)=

Cubic Feet

2 (Cu Ft Price per

Cu Ft)= Cost

Unit in Place

Method


component

Quantity Survey

Method

Best for new

construction


single thing (nails

bricks etc)

Detailed breakdown




IRS regulations


value




maintenance



black white or SS)













the value

Commercial


into Value

CR Steps



(ldquoEGIrdquo)



3 (NOI Price) = CR







sustained)


rentals 1-4 units


before expenses


investment

GRM Steps



Market Value




other sources

GIM Steps


GIM


Market Value


Appraisal Reports




Mac)








Base Lines run E-W


Taxes amp Interest













days

Taxes= Use 365 days



TimeLine Triggers







GAREC RampRs



Immediately



Brokerage firms










Ten (10) Days


listing expiration








Sixty (60) Days





















Six (6) Months




One (1) Year





months



Date

bull

Two (2) Years





Three (3) Years



Four (4) Years



month

Five (5) Years






Ten (10) Years






Fifteen (15) Years



Twenty (20) Years



same)

Forty (40) Years




Miscellaneous




only requirement





Study Guides








HOW

$220 000 x 965= $212 300

$212 300 x 175= $371525 (round Up)

$3716

MIP Monthly







HOW

$220 000 x 965= $212 300

$212 300 +$3716= $216 01600

$216 016 x 135= $2 916216

$2 91621612= $243018= $24302

Transfer tax






transfer tax $1220

HOW

$45000-$32873= $12127

$12 227100= $12127= $122

$122 x 10= $1220



$250000 Sales Price

$225000 New Loan


$250000-$0= $250000

$250000100= 2500

2500$010=$250

Intangibles Tax






tax $42300

HOW

$148000 x 95= $140600

$140 600 500= $28120= $28200

$28200 x 15= $42300


Study Guide



Naturales)





Personal Property

(Chattels)

Mobile




Accession


for the item



Relationship to

Parties


Intentions of

Annexing Party




Immobility Scarcity


Investment)














personrsquos)


Easement by




bull Actual

bull Hostile

bull Open

bull Notorious

bull Exclusive


Public Rights

(Government)








Compensationrdquo





On Agreement

Prescription

Condemnation

Operation of Law


Necessity









(NOT in GA)



Commonalities



Community Property

(NOT in GA)








lease

Timeshare








(ldquoLLCrdquo)














Buy

Appraise

Rent

Sell

Auction

Lease

Exchange





including your own

Accountability

(not Accounting)








lawn maintenance)





justifiable reason




the Agreement


bankruptcy










Steering (Agents)


categories





misrepresentation






Contracts










Voidable







agreement




Objective

(Lawful Purpose)


conveyed

















(Most Common)



a fee




due to anyone

Net Listing

(Illegal in GA)





Marketing Listings


(ldquoMLSrdquo)





Eviction of Lessee



Foreclosure







GA)






before maturity


Defaultrdquo)



Salerdquo)


approves





Foreclosure



theory) (Georgia)




4 weeks

Deed in Lieu of


Foreclosurerdquo)







Ginnie Mae






1968


Actrdquo)


Origin of Birth




Sex



Sex

Familial Status amp





Act (ldquoADArdquo)





Fair Housing


Race

Color

Religion

Sex

Handicap

Familial Status

National Origin



Value














Approach
















property itself




Progression amp

Regression




around it






dollar in value



Income Approach)











increase in value

Approaches to Value




Adjustments

Comps should be


6 months

Preferably within 1

mile of the Subject

NEVER adjust the

subject property


inferior ADD to the


value


better SUBTRACT

from the Comp for











Land Value)










dimensions of

Improvement

1 (L W)= Sq Ft

2 (Sq Ft Price per

Sq Ft)= Cost


Improvement

1 (L W H)=

Cubic Feet

2 (Cu Ft Price per

Cu Ft)= Cost

Unit in Place

Method


component

Quantity Survey

Method

Best for new

construction


single thing (nails

bricks etc)

Detailed breakdown




IRS regulations


value




maintenance



black white or SS)













the value

Commercial


into Value

CR Steps



(ldquoEGIrdquo)



3 (NOI Price) = CR







sustained)


rentals 1-4 units


before expenses


investment

GRM Steps



Market Value




other sources

GIM Steps


GIM


Market Value


Appraisal Reports




Mac)








Base Lines run E-W


Taxes amp Interest













days

Taxes= Use 365 days



TimeLine Triggers







GAREC RampRs



Immediately



Brokerage firms










Ten (10) Days


listing expiration








Sixty (60) Days





















Six (6) Months




One (1) Year





months



Date

bull

Two (2) Years





Three (3) Years



Four (4) Years



month

Five (5) Years






Ten (10) Years






Fifteen (15) Years



Twenty (20) Years



same)

Forty (40) Years




Miscellaneous




only requirement





Study Guides




$250000 Sales Price

$225000 New Loan


$250000-$0= $250000

$250000100= 2500

2500$010=$250

Intangibles Tax






tax $42300

HOW

$148000 x 95= $140600

$140 600 500= $28120= $28200

$28200 x 15= $42300


Study Guide



Naturales)





Personal Property

(Chattels)

Mobile




Accession


for the item



Relationship to

Parties


Intentions of

Annexing Party




Immobility Scarcity


Investment)














personrsquos)


Easement by




bull Actual

bull Hostile

bull Open

bull Notorious

bull Exclusive


Public Rights

(Government)








Compensationrdquo





On Agreement

Prescription

Condemnation

Operation of Law


Necessity









(NOT in GA)



Commonalities



Community Property

(NOT in GA)








lease

Timeshare








(ldquoLLCrdquo)














Buy

Appraise

Rent

Sell

Auction

Lease

Exchange





including your own

Accountability

(not Accounting)








lawn maintenance)





justifiable reason




the Agreement


bankruptcy










Steering (Agents)


categories





misrepresentation






Contracts










Voidable







agreement




Objective

(Lawful Purpose)


conveyed

















(Most Common)



a fee




due to anyone

Net Listing

(Illegal in GA)





Marketing Listings


(ldquoMLSrdquo)





Eviction of Lessee



Foreclosure







GA)






before maturity


Defaultrdquo)



Salerdquo)


approves





Foreclosure



theory) (Georgia)




4 weeks

Deed in Lieu of


Foreclosurerdquo)







Ginnie Mae






1968


Actrdquo)


Origin of Birth




Sex



Sex

Familial Status amp





Act (ldquoADArdquo)





Fair Housing


Race

Color

Religion

Sex

Handicap

Familial Status

National Origin



Value














Approach
















property itself




Progression amp

Regression




around it






dollar in value



Income Approach)











increase in value

Approaches to Value




Adjustments

Comps should be


6 months

Preferably within 1

mile of the Subject

NEVER adjust the

subject property


inferior ADD to the


value


better SUBTRACT

from the Comp for











Land Value)










dimensions of

Improvement

1 (L W)= Sq Ft

2 (Sq Ft Price per

Sq Ft)= Cost


Improvement

1 (L W H)=

Cubic Feet

2 (Cu Ft Price per

Cu Ft)= Cost

Unit in Place

Method


component

Quantity Survey

Method

Best for new

construction


single thing (nails

bricks etc)

Detailed breakdown




IRS regulations


value




maintenance



black white or SS)













the value

Commercial


into Value

CR Steps



(ldquoEGIrdquo)



3 (NOI Price) = CR







sustained)


rentals 1-4 units


before expenses


investment

GRM Steps



Market Value




other sources

GIM Steps


GIM


Market Value


Appraisal Reports




Mac)








Base Lines run E-W


Taxes amp Interest













days

Taxes= Use 365 days



TimeLine Triggers







GAREC RampRs



Immediately



Brokerage firms










Ten (10) Days


listing expiration








Sixty (60) Days





















Six (6) Months




One (1) Year





months



Date

bull

Two (2) Years





Three (3) Years



Four (4) Years



month

Five (5) Years






Ten (10) Years






Fifteen (15) Years



Twenty (20) Years



same)

Forty (40) Years




Miscellaneous




only requirement





Study Guides



Study Guide



Naturales)





Personal Property

(Chattels)

Mobile




Accession


for the item



Relationship to

Parties


Intentions of

Annexing Party




Immobility Scarcity


Investment)














personrsquos)


Easement by




bull Actual

bull Hostile

bull Open

bull Notorious

bull Exclusive


Public Rights

(Government)








Compensationrdquo





On Agreement

Prescription

Condemnation

Operation of Law


Necessity









(NOT in GA)



Commonalities



Community Property

(NOT in GA)








lease

Timeshare








(ldquoLLCrdquo)














Buy

Appraise

Rent

Sell

Auction

Lease

Exchange





including your own

Accountability

(not Accounting)








lawn maintenance)





justifiable reason




the Agreement


bankruptcy










Steering (Agents)


categories





misrepresentation






Contracts










Voidable







agreement




Objective

(Lawful Purpose)


conveyed

















(Most Common)



a fee




due to anyone

Net Listing

(Illegal in GA)





Marketing Listings


(ldquoMLSrdquo)





Eviction of Lessee



Foreclosure







GA)






before maturity


Defaultrdquo)



Salerdquo)


approves





Foreclosure



theory) (Georgia)




4 weeks

Deed in Lieu of


Foreclosurerdquo)







Ginnie Mae






1968


Actrdquo)


Origin of Birth




Sex



Sex

Familial Status amp





Act (ldquoADArdquo)





Fair Housing


Race

Color

Religion

Sex

Handicap

Familial Status

National Origin



Value














Approach
















property itself




Progression amp

Regression




around it






dollar in value



Income Approach)











increase in value

Approaches to Value




Adjustments

Comps should be


6 months

Preferably within 1

mile of the Subject

NEVER adjust the

subject property


inferior ADD to the


value


better SUBTRACT

from the Comp for











Land Value)










dimensions of

Improvement

1 (L W)= Sq Ft

2 (Sq Ft Price per

Sq Ft)= Cost


Improvement

1 (L W H)=

Cubic Feet

2 (Cu Ft Price per

Cu Ft)= Cost

Unit in Place

Method


component

Quantity Survey

Method

Best for new

construction


single thing (nails

bricks etc)

Detailed breakdown




IRS regulations


value




maintenance



black white or SS)













the value

Commercial


into Value

CR Steps



(ldquoEGIrdquo)



3 (NOI Price) = CR







sustained)


rentals 1-4 units


before expenses


investment

GRM Steps



Market Value




other sources

GIM Steps


GIM


Market Value


Appraisal Reports




Mac)








Base Lines run E-W


Taxes amp Interest













days

Taxes= Use 365 days



TimeLine Triggers







GAREC RampRs



Immediately



Brokerage firms










Ten (10) Days


listing expiration








Sixty (60) Days





















Six (6) Months




One (1) Year





months



Date

bull

Two (2) Years





Three (3) Years



Four (4) Years



month

Five (5) Years






Ten (10) Years






Fifteen (15) Years



Twenty (20) Years



same)

Forty (40) Years




Miscellaneous




only requirement





Study Guides











personrsquos)


Easement by




bull Actual

bull Hostile

bull Open

bull Notorious

bull Exclusive


Public Rights

(Government)








Compensationrdquo





On Agreement

Prescription

Condemnation

Operation of Law


Necessity









(NOT in GA)



Commonalities



Community Property

(NOT in GA)








lease

Timeshare








(ldquoLLCrdquo)














Buy

Appraise

Rent

Sell

Auction

Lease

Exchange





including your own

Accountability

(not Accounting)








lawn maintenance)





justifiable reason




the Agreement


bankruptcy










Steering (Agents)


categories





misrepresentation






Contracts










Voidable







agreement




Objective

(Lawful Purpose)


conveyed

















(Most Common)



a fee




due to anyone

Net Listing

(Illegal in GA)





Marketing Listings


(ldquoMLSrdquo)





Eviction of Lessee



Foreclosure







GA)






before maturity


Defaultrdquo)



Salerdquo)


approves





Foreclosure



theory) (Georgia)




4 weeks

Deed in Lieu of


Foreclosurerdquo)







Ginnie Mae






1968


Actrdquo)


Origin of Birth




Sex



Sex

Familial Status amp





Act (ldquoADArdquo)





Fair Housing


Race

Color

Religion

Sex

Handicap

Familial Status

National Origin



Value














Approach
















property itself




Progression amp

Regression




around it






dollar in value



Income Approach)











increase in value

Approaches to Value




Adjustments

Comps should be


6 months

Preferably within 1

mile of the Subject

NEVER adjust the

subject property


inferior ADD to the


value


better SUBTRACT

from the Comp for











Land Value)










dimensions of

Improvement

1 (L W)= Sq Ft

2 (Sq Ft Price per

Sq Ft)= Cost


Improvement

1 (L W H)=

Cubic Feet

2 (Cu Ft Price per

Cu Ft)= Cost

Unit in Place

Method


component

Quantity Survey

Method

Best for new

construction


single thing (nails

bricks etc)

Detailed breakdown




IRS regulations


value




maintenance



black white or SS)













the value

Commercial


into Value

CR Steps



(ldquoEGIrdquo)



3 (NOI Price) = CR







sustained)


rentals 1-4 units


before expenses


investment

GRM Steps



Market Value




other sources

GIM Steps


GIM


Market Value


Appraisal Reports




Mac)








Base Lines run E-W


Taxes amp Interest













days

Taxes= Use 365 days



TimeLine Triggers







GAREC RampRs



Immediately



Brokerage firms










Ten (10) Days


listing expiration








Sixty (60) Days





















Six (6) Months




One (1) Year





months



Date

bull

Two (2) Years





Three (3) Years



Four (4) Years



month

Five (5) Years






Ten (10) Years






Fifteen (15) Years



Twenty (20) Years



same)

Forty (40) Years




Miscellaneous




only requirement





Study Guides










(NOT in GA)



Commonalities



Community Property

(NOT in GA)








lease

Timeshare








(ldquoLLCrdquo)














Buy

Appraise

Rent

Sell

Auction

Lease

Exchange





including your own

Accountability

(not Accounting)








lawn maintenance)





justifiable reason




the Agreement


bankruptcy










Steering (Agents)


categories





misrepresentation






Contracts










Voidable







agreement




Objective

(Lawful Purpose)


conveyed

















(Most Common)



a fee




due to anyone

Net Listing

(Illegal in GA)





Marketing Listings


(ldquoMLSrdquo)





Eviction of Lessee



Foreclosure







GA)






before maturity


Defaultrdquo)



Salerdquo)


approves





Foreclosure



theory) (Georgia)




4 weeks

Deed in Lieu of


Foreclosurerdquo)







Ginnie Mae






1968


Actrdquo)


Origin of Birth




Sex



Sex

Familial Status amp





Act (ldquoADArdquo)





Fair Housing


Race

Color

Religion

Sex

Handicap

Familial Status

National Origin



Value














Approach
















property itself




Progression amp

Regression




around it






dollar in value



Income Approach)











increase in value

Approaches to Value




Adjustments

Comps should be


6 months

Preferably within 1

mile of the Subject

NEVER adjust the

subject property


inferior ADD to the


value


better SUBTRACT

from the Comp for











Land Value)










dimensions of

Improvement

1 (L W)= Sq Ft

2 (Sq Ft Price per

Sq Ft)= Cost


Improvement

1 (L W H)=

Cubic Feet

2 (Cu Ft Price per

Cu Ft)= Cost

Unit in Place

Method


component

Quantity Survey

Method

Best for new

construction


single thing (nails

bricks etc)

Detailed breakdown




IRS regulations


value




maintenance



black white or SS)













the value

Commercial


into Value

CR Steps



(ldquoEGIrdquo)



3 (NOI Price) = CR







sustained)


rentals 1-4 units


before expenses


investment

GRM Steps



Market Value




other sources

GIM Steps


GIM


Market Value


Appraisal Reports




Mac)








Base Lines run E-W


Taxes amp Interest













days

Taxes= Use 365 days



TimeLine Triggers







GAREC RampRs



Immediately



Brokerage firms










Ten (10) Days


listing expiration








Sixty (60) Days





















Six (6) Months




One (1) Year





months



Date

bull

Two (2) Years





Three (3) Years



Four (4) Years



month

Five (5) Years






Ten (10) Years






Fifteen (15) Years



Twenty (20) Years



same)

Forty (40) Years




Miscellaneous




only requirement





Study Guides








Buy

Appraise

Rent

Sell

Auction

Lease

Exchange





including your own

Accountability

(not Accounting)








lawn maintenance)





justifiable reason




the Agreement


bankruptcy










Steering (Agents)


categories





misrepresentation






Contracts










Voidable







agreement




Objective

(Lawful Purpose)


conveyed

















(Most Common)



a fee




due to anyone

Net Listing

(Illegal in GA)





Marketing Listings


(ldquoMLSrdquo)





Eviction of Lessee



Foreclosure







GA)






before maturity


Defaultrdquo)



Salerdquo)


approves





Foreclosure



theory) (Georgia)




4 weeks

Deed in Lieu of


Foreclosurerdquo)







Ginnie Mae






1968


Actrdquo)


Origin of Birth




Sex



Sex

Familial Status amp





Act (ldquoADArdquo)





Fair Housing


Race

Color

Religion

Sex

Handicap

Familial Status

National Origin



Value














Approach
















property itself




Progression amp

Regression




around it






dollar in value



Income Approach)











increase in value

Approaches to Value




Adjustments

Comps should be


6 months

Preferably within 1

mile of the Subject

NEVER adjust the

subject property


inferior ADD to the


value


better SUBTRACT

from the Comp for











Land Value)










dimensions of

Improvement

1 (L W)= Sq Ft

2 (Sq Ft Price per

Sq Ft)= Cost


Improvement

1 (L W H)=

Cubic Feet

2 (Cu Ft Price per

Cu Ft)= Cost

Unit in Place

Method


component

Quantity Survey

Method

Best for new

construction


single thing (nails

bricks etc)

Detailed breakdown




IRS regulations


value




maintenance



black white or SS)













the value

Commercial


into Value

CR Steps



(ldquoEGIrdquo)



3 (NOI Price) = CR







sustained)


rentals 1-4 units


before expenses


investment

GRM Steps



Market Value




other sources

GIM Steps


GIM


Market Value


Appraisal Reports




Mac)








Base Lines run E-W


Taxes amp Interest













days

Taxes= Use 365 days



TimeLine Triggers







GAREC RampRs



Immediately



Brokerage firms










Ten (10) Days


listing expiration








Sixty (60) Days





















Six (6) Months




One (1) Year





months



Date

bull

Two (2) Years





Three (3) Years



Four (4) Years



month

Five (5) Years






Ten (10) Years






Fifteen (15) Years



Twenty (20) Years



same)

Forty (40) Years




Miscellaneous




only requirement





Study Guides








Steering (Agents)


categories





misrepresentation






Contracts










Voidable







agreement




Objective

(Lawful Purpose)


conveyed

















(Most Common)



a fee




due to anyone

Net Listing

(Illegal in GA)





Marketing Listings


(ldquoMLSrdquo)





Eviction of Lessee



Foreclosure







GA)






before maturity


Defaultrdquo)



Salerdquo)


approves





Foreclosure



theory) (Georgia)




4 weeks

Deed in Lieu of


Foreclosurerdquo)







Ginnie Mae






1968


Actrdquo)


Origin of Birth




Sex



Sex

Familial Status amp





Act (ldquoADArdquo)





Fair Housing


Race

Color

Religion

Sex

Handicap

Familial Status

National Origin



Value














Approach
















property itself




Progression amp

Regression




around it






dollar in value



Income Approach)











increase in value

Approaches to Value




Adjustments

Comps should be


6 months

Preferably within 1

mile of the Subject

NEVER adjust the

subject property


inferior ADD to the


value


better SUBTRACT

from the Comp for











Land Value)










dimensions of

Improvement

1 (L W)= Sq Ft

2 (Sq Ft Price per

Sq Ft)= Cost


Improvement

1 (L W H)=

Cubic Feet

2 (Cu Ft Price per

Cu Ft)= Cost

Unit in Place

Method


component

Quantity Survey

Method

Best for new

construction


single thing (nails

bricks etc)

Detailed breakdown




IRS regulations


value




maintenance



black white or SS)













the value

Commercial


into Value

CR Steps



(ldquoEGIrdquo)



3 (NOI Price) = CR







sustained)


rentals 1-4 units


before expenses


investment

GRM Steps



Market Value




other sources

GIM Steps


GIM


Market Value


Appraisal Reports




Mac)








Base Lines run E-W


Taxes amp Interest













days

Taxes= Use 365 days



TimeLine Triggers







GAREC RampRs



Immediately



Brokerage firms










Ten (10) Days


listing expiration








Sixty (60) Days





















Six (6) Months




One (1) Year





months



Date

bull

Two (2) Years





Three (3) Years



Four (4) Years



month

Five (5) Years






Ten (10) Years






Fifteen (15) Years



Twenty (20) Years



same)

Forty (40) Years




Miscellaneous




only requirement





Study Guides





Objective

(Lawful Purpose)


conveyed

















(Most Common)



a fee




due to anyone

Net Listing

(Illegal in GA)





Marketing Listings


(ldquoMLSrdquo)





Eviction of Lessee



Foreclosure







GA)






before maturity


Defaultrdquo)



Salerdquo)


approves





Foreclosure



theory) (Georgia)




4 weeks

Deed in Lieu of


Foreclosurerdquo)







Ginnie Mae






1968


Actrdquo)


Origin of Birth




Sex



Sex

Familial Status amp





Act (ldquoADArdquo)





Fair Housing


Race

Color

Religion

Sex

Handicap

Familial Status

National Origin



Value














Approach
















property itself




Progression amp

Regression




around it






dollar in value



Income Approach)











increase in value

Approaches to Value




Adjustments

Comps should be


6 months

Preferably within 1

mile of the Subject

NEVER adjust the

subject property


inferior ADD to the


value


better SUBTRACT

from the Comp for











Land Value)










dimensions of

Improvement

1 (L W)= Sq Ft

2 (Sq Ft Price per

Sq Ft)= Cost


Improvement

1 (L W H)=

Cubic Feet

2 (Cu Ft Price per

Cu Ft)= Cost

Unit in Place

Method


component

Quantity Survey

Method

Best for new

construction


single thing (nails

bricks etc)

Detailed breakdown




IRS regulations


value




maintenance



black white or SS)













the value

Commercial


into Value

CR Steps



(ldquoEGIrdquo)



3 (NOI Price) = CR







sustained)


rentals 1-4 units


before expenses


investment

GRM Steps



Market Value




other sources

GIM Steps


GIM


Market Value


Appraisal Reports




Mac)








Base Lines run E-W


Taxes amp Interest













days

Taxes= Use 365 days



TimeLine Triggers







GAREC RampRs



Immediately



Brokerage firms










Ten (10) Days


listing expiration








Sixty (60) Days





















Six (6) Months




One (1) Year





months



Date

bull

Two (2) Years





Three (3) Years



Four (4) Years



month

Five (5) Years






Ten (10) Years






Fifteen (15) Years



Twenty (20) Years



same)

Forty (40) Years




Miscellaneous




only requirement





Study Guides




Eviction of Lessee



Foreclosure







GA)






before maturity


Defaultrdquo)



Salerdquo)


approves





Foreclosure



theory) (Georgia)




4 weeks

Deed in Lieu of


Foreclosurerdquo)







Ginnie Mae






1968


Actrdquo)


Origin of Birth




Sex



Sex

Familial Status amp





Act (ldquoADArdquo)





Fair Housing


Race

Color

Religion

Sex

Handicap

Familial Status

National Origin



Value














Approach
















property itself




Progression amp

Regression




around it






dollar in value



Income Approach)











increase in value

Approaches to Value




Adjustments

Comps should be


6 months

Preferably within 1

mile of the Subject

NEVER adjust the

subject property


inferior ADD to the


value


better SUBTRACT

from the Comp for











Land Value)










dimensions of

Improvement

1 (L W)= Sq Ft

2 (Sq Ft Price per

Sq Ft)= Cost


Improvement

1 (L W H)=

Cubic Feet

2 (Cu Ft Price per

Cu Ft)= Cost

Unit in Place

Method


component

Quantity Survey

Method

Best for new

construction


single thing (nails

bricks etc)

Detailed breakdown




IRS regulations


value




maintenance



black white or SS)













the value

Commercial


into Value

CR Steps



(ldquoEGIrdquo)



3 (NOI Price) = CR







sustained)


rentals 1-4 units


before expenses


investment

GRM Steps



Market Value




other sources

GIM Steps


GIM


Market Value


Appraisal Reports




Mac)








Base Lines run E-W


Taxes amp Interest













days

Taxes= Use 365 days



TimeLine Triggers







GAREC RampRs



Immediately



Brokerage firms










Ten (10) Days


listing expiration








Sixty (60) Days





















Six (6) Months




One (1) Year





months



Date

bull

Two (2) Years





Three (3) Years



Four (4) Years



month

Five (5) Years






Ten (10) Years






Fifteen (15) Years



Twenty (20) Years



same)

Forty (40) Years




Miscellaneous




only requirement





Study Guides






1968


Actrdquo)


Origin of Birth




Sex



Sex

Familial Status amp





Act (ldquoADArdquo)





Fair Housing


Race

Color

Religion

Sex

Handicap

Familial Status

National Origin



Value














Approach
















property itself




Progression amp

Regression




around it






dollar in value



Income Approach)











increase in value

Approaches to Value




Adjustments

Comps should be


6 months

Preferably within 1

mile of the Subject

NEVER adjust the

subject property


inferior ADD to the


value


better SUBTRACT

from the Comp for











Land Value)










dimensions of

Improvement

1 (L W)= Sq Ft

2 (Sq Ft Price per

Sq Ft)= Cost


Improvement

1 (L W H)=

Cubic Feet

2 (Cu Ft Price per

Cu Ft)= Cost

Unit in Place

Method


component

Quantity Survey

Method

Best for new

construction


single thing (nails

bricks etc)

Detailed breakdown




IRS regulations


value




maintenance



black white or SS)













the value

Commercial


into Value

CR Steps



(ldquoEGIrdquo)



3 (NOI Price) = CR







sustained)


rentals 1-4 units


before expenses


investment

GRM Steps



Market Value




other sources

GIM Steps


GIM


Market Value


Appraisal Reports




Mac)








Base Lines run E-W


Taxes amp Interest













days

Taxes= Use 365 days



TimeLine Triggers







GAREC RampRs



Immediately



Brokerage firms










Ten (10) Days


listing expiration








Sixty (60) Days





















Six (6) Months




One (1) Year





months



Date

bull

Two (2) Years





Three (3) Years



Four (4) Years



month

Five (5) Years






Ten (10) Years






Fifteen (15) Years



Twenty (20) Years



same)

Forty (40) Years




Miscellaneous




only requirement





Study Guides







Approach
















property itself




Progression amp

Regression




around it






dollar in value



Income Approach)











increase in value

Approaches to Value




Adjustments

Comps should be


6 months

Preferably within 1

mile of the Subject

NEVER adjust the

subject property


inferior ADD to the


value


better SUBTRACT

from the Comp for











Land Value)










dimensions of

Improvement

1 (L W)= Sq Ft

2 (Sq Ft Price per

Sq Ft)= Cost


Improvement

1 (L W H)=

Cubic Feet

2 (Cu Ft Price per

Cu Ft)= Cost

Unit in Place

Method


component

Quantity Survey

Method

Best for new

construction


single thing (nails

bricks etc)

Detailed breakdown




IRS regulations


value




maintenance



black white or SS)













the value

Commercial


into Value

CR Steps



(ldquoEGIrdquo)



3 (NOI Price) = CR







sustained)


rentals 1-4 units


before expenses


investment

GRM Steps



Market Value




other sources

GIM Steps


GIM


Market Value


Appraisal Reports




Mac)








Base Lines run E-W


Taxes amp Interest













days

Taxes= Use 365 days



TimeLine Triggers







GAREC RampRs



Immediately



Brokerage firms










Ten (10) Days


listing expiration








Sixty (60) Days





















Six (6) Months




One (1) Year





months



Date

bull

Two (2) Years





Three (3) Years



Four (4) Years



month

Five (5) Years






Ten (10) Years






Fifteen (15) Years



Twenty (20) Years



same)

Forty (40) Years




Miscellaneous




only requirement





Study Guides




increase in value

Approaches to Value




Adjustments

Comps should be


6 months

Preferably within 1

mile of the Subject

NEVER adjust the

subject property


inferior ADD to the


value


better SUBTRACT

from the Comp for











Land Value)










dimensions of

Improvement

1 (L W)= Sq Ft

2 (Sq Ft Price per

Sq Ft)= Cost


Improvement

1 (L W H)=

Cubic Feet

2 (Cu Ft Price per

Cu Ft)= Cost

Unit in Place

Method


component

Quantity Survey

Method

Best for new

construction


single thing (nails

bricks etc)

Detailed breakdown




IRS regulations


value




maintenance



black white or SS)













the value

Commercial


into Value

CR Steps



(ldquoEGIrdquo)



3 (NOI Price) = CR







sustained)


rentals 1-4 units


before expenses


investment

GRM Steps



Market Value




other sources

GIM Steps


GIM


Market Value


Appraisal Reports




Mac)








Base Lines run E-W


Taxes amp Interest













days

Taxes= Use 365 days



TimeLine Triggers







GAREC RampRs



Immediately



Brokerage firms










Ten (10) Days


listing expiration








Sixty (60) Days





















Six (6) Months




One (1) Year





months



Date

bull

Two (2) Years





Three (3) Years



Four (4) Years



month

Five (5) Years






Ten (10) Years






Fifteen (15) Years



Twenty (20) Years



same)

Forty (40) Years




Miscellaneous




only requirement





Study Guides





IRS regulations


value




maintenance



black white or SS)













the value

Commercial


into Value

CR Steps



(ldquoEGIrdquo)



3 (NOI Price) = CR







sustained)


rentals 1-4 units


before expenses


investment

GRM Steps



Market Value




other sources

GIM Steps


GIM


Market Value


Appraisal Reports




Mac)








Base Lines run E-W


Taxes amp Interest













days

Taxes= Use 365 days



TimeLine Triggers







GAREC RampRs



Immediately



Brokerage firms










Ten (10) Days


listing expiration








Sixty (60) Days





















Six (6) Months




One (1) Year





months



Date

bull

Two (2) Years





Three (3) Years



Four (4) Years



month

Five (5) Years






Ten (10) Years






Fifteen (15) Years



Twenty (20) Years



same)

Forty (40) Years




Miscellaneous




only requirement





Study Guides



Appraisal Reports




Mac)








Base Lines run E-W


Taxes amp Interest













days

Taxes= Use 365 days



TimeLine Triggers







GAREC RampRs



Immediately



Brokerage firms










Ten (10) Days


listing expiration








Sixty (60) Days





















Six (6) Months




One (1) Year





months



Date

bull

Two (2) Years





Three (3) Years



Four (4) Years



month

Five (5) Years






Ten (10) Years






Fifteen (15) Years



Twenty (20) Years



same)

Forty (40) Years




Miscellaneous




only requirement





Study Guides



TimeLine Triggers







GAREC RampRs



Immediately



Brokerage firms










Ten (10) Days


listing expiration








Sixty (60) Days





















Six (6) Months




One (1) Year





months



Date

bull

Two (2) Years





Three (3) Years



Four (4) Years



month

Five (5) Years






Ten (10) Years






Fifteen (15) Years



Twenty (20) Years



same)

Forty (40) Years




Miscellaneous




only requirement





Study Guides


















Six (6) Months




One (1) Year





months



Date

bull

Two (2) Years





Three (3) Years



Four (4) Years



month

Five (5) Years






Ten (10) Years






Fifteen (15) Years



Twenty (20) Years



same)

Forty (40) Years




Miscellaneous




only requirement





Study Guides




month

Five (5) Years






Ten (10) Years






Fifteen (15) Years



Twenty (20) Years



same)

Forty (40) Years




Miscellaneous




only requirement





Study Guides


Approaches to Appraisals

Documents

Transcript of Approaches to Appraisals