Real Property Analysis and Reports Key Terms

Understanding real property analysis and reports terminology

Real property analysis and reports are essential tools for any individual looking to make smart investments in the real estate market. A detailed analysis provides in-depth information and historical financial data about a specific property to help the investor decide if a purchase will be profitable. Understanding the key terms and lingo used in real property analysis and reports will maximize your chances for your real estate investment to be wise and profitable.

Comparative market analysis

A comparative market analysis, or CMA, is performed by a real estate agent. This informal analysis is done to obtain a listing price in order to put a property up for sale. It is performed by reviewing similar properties recently sold. A CMA is a vital piece of information for real estate investors, since it can greatly alter their bottom-line profit.

Revaluation analysis

Several factors associated with a group of properties are studied when a revaluation analysis is performed to see if it alters a property's assessed tax value. Information pertaining to a revaluation analysis is important to include in a real property analysis, since property taxes can greatly impact the cost of a purchase.

Investment set codes

Investment Set Codes, usually referred to as ISCs, are overall capitalization rates. ISC figures reflect what is expected to happen in the real estate marketplace for that year. The values listed in the ISC codes are used when conducting real estate appraisals. ISCs are conducted for most geographical areas, and are based on information gathered from banks regarding mortgage interest rates, loan-to-value ratios, and terms.

Median sales trend

Understanding an area's median sales trend is very useful for a real estate investor, as it helps to find the true middle range of property values in an area. The median sales trend is often a more useful figure to have than an average sales trend from an analysis standpoint, because extreme high and low sales tend to throw averages off.

Tax mapping

Local governments are legally required to have up-to-date tax maps. Tax mapping shows the true size, shape and geographical features of every parcel in a particular tax assessing unit. These maps can provide a potential investor with an accurate representation of a property without having to look at an official survey or review the property on foot.

Appraised value

A property's appraised value is determined by a licensed state appraiser. The appraiser considers recent comparable sales, an analysis of the property's features -- like its square footage -- and takes into account the appraiser's knowledge of the subject matter and the area. The property's appraised value is an essential figure to have in order to secure financing.

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