A real estate appraisal service is a profession that provides unbiased, objective and defensible estimates or appraisals of the value of property. These can be used for a variety of reasons, including mortgage lending purposes, tax assessments, lease negotiations and more. Appraisers can work in both the residential and commercial sectors of real estate.
There are many different types of appraisals, including fee simple estate, leasehold estate, preservation easements and many other property interests. Each type of assignment requires a specific approach, with the scope and value conclusion being defined in the contract between the parties.
An appraisal is a supportable and defensible estimate of the value of a specified interest in real property at a given date, usually based on current market activity and evidence. The value is usually market, insurable or investment value, but it may also be the value of the land, the building or other improvements that are included within the real property.
The valuation process involves examining and inspecting the property, comparing it to similar properties in order to determine its value. This includes the condition of the building and grounds, any upgrades or additions made to the property, as well as the location and size of the lot.
As you can imagine, it takes a lot of expertise and experience to be able to make an accurate assessment. This is why some appraisers specialize in one particular field of real estate, such as office buildings, retail locations or hotels. Others specialize in certain neighborhoods or types of homes, such as single-family residences.
A good appraiser is a critical part of any successful real estate transaction, helping to ensure that the final price tag is right and the property is valued according to industry standards. This can be especially helpful when the buyer or seller has a unique financial situation that requires them to pay a higher price than would normally be expected in an open marketplace.
In addition to real estate, appraisers are also responsible for valuing other assets, such as jewelry and art. Investors often use the services of an appraiser to determine the value of these items, as they are less liquid than real property.
There are several organizations that set the standards for appraisers and their practice. These include the Appraisal Institute, the National Association of Real Estate Appraisers and the International Right of Way Association.
Most state appraiser regulatory agencies require that appraisers take approved training and complete exams in order to be licensed or certified. These courses and examinations can vary by state, and it’s always a good idea to check with your state’s appraiser regulatory agency for details.
While an appraiser’s primary responsibility is to determine the value of real property, they are also involved in other aspects of the appraisal process, such as analyzing market trends and preparing reports. The reports can be very detailed and comprehensive, and are typically required in cases where the appraisal involves a large or complex piece of real estate.