- Binary (Dummy) Variable(1) Binary variables are qualitative data items that have only two possibilities – yes or no (for example, corner location). (2) A variable for which only two values are possible, such as results from a yes-or-no question; for example, does this building have any fireplaces? Used in some models to separate the influence of categorical variables. Also called a dichotomous variable or dummy variable.
- Blended Model
- Blind Testing
- BootstrapA computer-intensive method of statistical inference that is based on a repeated resampling of data to provide more information about the population characteristics. The bootstrap is a data-driven procedure that is particularly useful for confidence interval approximation when no traditional formulas are available or the sample has been drawn from a population that does not conform to the normal distribution.
- Bump LogicUser-defined methods or criteria to select from or combine various classes of valuation services, e.g., AVM, BPO, hybrid valuation, drive-by or full appraisal.
- Bundle of Rights
- CalibrationThe process of estimating the coefficients in a mass appraisal model.
- CAMASee computer-assisted mass appraisal.
- CascadeA decision-process for using multiple AVMs to evaluate a subject property. The logic underlying an AVM cascade consists of two components - a model preference table and usage rules (for instance, confidence score thresholds) for each model included in the cascade. Cascades cycle through a predetermined progression of AVMs until one of these models produces a sufficiently accurate valuation.
- Cash-equivalent Sale Price
- Categorical VariableA variable summarizing more complex qualitative judgments by assigning each to a category or giving each a rating. For example, quality of construction might be categorized as poor, fair, average, or good, or assigned a rating from 1 to 4. The categories might then be scaled by assigning a value of
- Caveat Emptor"Let the buyer beware." A common maxim stating that the buyer purchases at his or her own risk.
- Central Tendency, Measure of
- Chronological Age
- Cluster AnalysisA statistical technique for grouping cases (for example, properties) based on specified variables, for example, size, age, and construction quality. The objective of cluster analysis is to generate groupings that are internally homogenous and highly different from one another. Various cluster algorithms can be employed.
- Coding(1) The act of reducing a description of a unique object, such as a parcel of real estate, to a set of one or more measures or counts of certain of its characteristics, such as square footage, number of bathrooms, and the like. (2) Encoding, a related term, is usually used to refer to the act of translating coded descriptions useful to human beings into a form that can be processed by computers. (3) Coding is sometimes also used to refer to the writing of instructions that direct the processing done by computers.
- Coefficient of ConcentrationThe percentage of observations falling within a specified percentage (say, 15 percent) of a measure of central tendency.
- Coefficient of Determination (R2)A statistic that characterizes two or more sets of numbers. The coefficient of determination, when multiplied by 100, gives the percentage strength of the (linear) relationship between or among the sets of numbers. (See correlation.) For two variables, the coefficient of determination and the square of the correlation coefficient are identical; for three or more variables, the coefficient of determination measures the strength of the relationship between the dependent variable and all the independent variables combined.
- Coefficient of Disperson (COD)
- Coefficient of Variation (COV)
- CompSee Comparable
- Comp SetThe set of properties that have been selected for valuation purposes of the Subject Property.
- Comparable (“Comp”)A sale in the area of the Subject Property that has characteristics and attributes that are similar to those of the Subject Property and is considered for valuation purposes.
- Comparable Sales; Comparables(1) Recently sold properties that are similar in important respects to a property being appraised. The sale price and the physical, functional, and locational characteristics of each of the properties are compared to those of the property being appraised in order to arrive at an estimate of value. (2) By extension, the term "comparables" is sometimes used to refer to properties with rent or income patterns comparable to those of a property being appraised.
- Comparable Sales ModelWhether performed by an appraiser or an ‘appraiser emulation model,’ comparable sales analysis seeks to identify properties that resemble the subject in terms of location and building attributes, and then adjust these ‘comparables’ to compensate for any dissimilarities. These adjustments form the basis for an estimate of market value.
- Computer-Assisted Mass Appraisal (CAMA)
- ConditionA judgment of the depreciation of an improvement. Note: This is a difficult area of comparison because although the condition of the subject is known, it is difficult to know the condition of the comparable. Differences in condition may justify variances in selling prices of similar assets. An investigation of the condition of the comparables should be done, if possible.
- Confidence IntervalA range of values, calculated from the sample observations, that are believed, with a particular probability, to contain the true population parameter (mean, median, COD). The confidence interval is not a measure of precision for the sample statistic or point estimate, but a measure of the precision of the sampling process. See reliability.
b) AVMs 201: A Practical Guide to the Implementation of Automated Valuation Models, Jim Kirchmeyer, 2008.
d) Collateral Assessment & Technologies Committee, Summary of Definitions & Terms, 2006.
e) Joint Industry Task Force on AVMs, IAAO Standard on AVM Glossary, September 2003. https://www.iaao.org/media/standards/AVM_STANDARD.pdf
f) Appraisal Institute, Joint Industry Task Force on Automated Valuation Models, Work Group Terminology, 2005.
g) Merriam-Webster (https://www.merriam-webster.com/)