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What is a real estate appraisal?

A Real Estate Appraisal is an estimate of value of an adequately described property, as of a specific date, supported by presentation and analysis of relevant data.

Why is it important?

Appraisals are used by many people for many different reasons. The most common is to document the value of property for financing purposes, but there are many other uses. During the sale of property people often need independent opinions for decision making. Property value is important for tax and estate planning. Sometimes when partnerships, families, or businesses split up assets, someone will receive money and others will receive real estate. By it’s nature, real estate often cannot be divided equally.

Who uses appraisals?

Who is the client? Who uses appraisals? These are very different questions. The client is typically the procuring party, the one that buys the appraisal. The people that use appraisals are very diverse, and include: lenders, borrowers, attorneys, accountants, corporations, buyers, sellers, judges, tax officials and even real estate professionals that require an unbiased and independent opinion of value. While there is typically one client, there are often many people depending on the unbiased opinion of the Appraiser.

What is “The Appraisal Process”?

For over seventy years there has been an accumulation of laws, professional opinions, and formal code of conduct that has shaped the steps that an Appraiser should take on any given assignment. These steps are called “The Appraisal Process” and the conduct of the Appraiser during this process is governmentally enforced through standards called “The Uniform Standards of Professional Conduct” or USPAP.

What’s the Value?

While everyone has an opinion of value for any property of interest, the Appraiser’s opinion is governed by many rules, his or hers personal research, and the Appraiser’s integrity. While many people will give you their opinion of value without much preparation or analysis, the Appraiser must consider all the relevant data, rules and regulations before answering that question.

 

 

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