What is a fee simple market value?
Fee Simple Value means the appraised value of a property for which the owner has absolute ownership, unencumbered by any other interest or estate subject only to Permitted Encumbrances, and the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat.
What is the difference between leased fee and fee simple appraisal?
The primary property rights in appraisals are Fee Simple Estate or Leased Fee Estate. Fee simple includes the “full bundle” of rights while leases convey partial property rights to tenants for their use and occupancy.
What are the three approaches to value in an appraisal?
Appraisers rely on the following three methods of establishing real estate property values:
- Sales comparison. This is the most common method, where appraisers value a property based on the recent selling prices of similar properties in the same neighborhood.
- Cost approach.
- Income approach.
What does fee simple mean in commercial real estate?
What Does Fee Simple Mean? Fee simple ownership is the absolute ownership of real property, in which the owner holds unconditional power over the land, as well as any improvements — including buildings — that sit on it.
What does fee simple interest mean?
An interest in land. Land owned in fee simple is owned completely, without any limitations or conditions. This type of unlimited estate is called absolute. A fee simple is generally created when a deed gives the land with no conditions, usually using the words like “to John Doe” or “to John Doe and his heirs”.
Is owner occupied fee simple?
With a fee simple estate, the owner has not given away or shared any of the aforementioned rights. Fee simple positions are typically appraised when a property is owner-occupied.
What is income approach to value?
The income approach is a real estate valuation method that uses the income the property generates to estimate fair value. It’s calculated by dividing the net operating income by the capitalization rate.
What is cost approach value?
The cost approach is a real estate valuation method that estimates the price a buyer should pay for a piece of property is equal the cost to build an equivalent building. In the cost approach, the property’s value is equal to the cost of land, plus total costs of construction, less depreciation.