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~ <br />Definitions <br />Market Value <br />The most probable price which a property should bring in a competitive and open market under all <br />conditions requisite to a fair sale, the buyer and seller, each acting prudently and knowledgeably and <br />assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation <br />of a sale as of a specified date and the passing of tide from seller to buyer under conditions whereby: <br />a. Buyer and seller are typically motivated; <br />b. Both parties are well informed or well advised, and acting in what they consider their own <br />best interests; <br />c. A reasonable time is allowed for exposure in the open market; <br />d. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangetnents <br />comparable thereto; and <br />e. The price represents the normal consideration for the property sold unaffected by special or <br />creative financing or sales concessions granted by anyone associated with the sale. I <br />Fee Simnle <br />An absolute fee; a fee without limitations to any particular dass of heirs or restrictions, but subject <br />to the ]imitations of eminent domain, escheat; police power, and taxation. An inheritable estate. 2 <br />Leased Fee <br />An ownership interest held by a landlord with the right of use and occupancy conveyed by lease to <br />others; usually consists of the right to receive rent and [he right of repossession at the termination <br />of the lease. 3 <br />Going Concern Value <br />The value created by a proven property operation; considered as a separate entity to be valued with <br />a specific business establishment. 4 <br />Business Value <br />A value enhancement that results from items of intangible personal property such as marketing, and <br />management skill, an assembled workforce, working capitol, trade names, franchises, patents, <br />trademarks, conteacts, leases, and operating agreements. 5 <br />1 Department of Treasury, Office of the Comptroller of the Currency, 12 CFR Par[ 34.42. <br />2 American Institute of Real Estate Appraisers, Ist ed. The Dictionarv of Real Estate Appraisal <br />Chicago, Illinois: AIREA, 1984) p. 123. <br />3 Ibid, p. (79 <br />4Ibid, p. ]60 <br />5 Ibid, p. 44 <br />PAT MURPHY & ASSOCIATES <br />