Property Valuation
What is 'value in use' as distinguished from 'market value' in North Dakota appraisal?
AThe same thing as market value
BThe value a specific property has to a specific user for a specific purpose, regardless of what it would sell for on the open market✓ Correct
CThe assessed value for property tax purposes
DThe value after depreciation only
Explanation
Value in use is the value of a property to a specific user for a specific use, which may differ significantly from market value. A special-purpose building used by its owner may have higher value in use than market value.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
Math Concepts
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