Real Property Appraisal
An appraisal of real property is the act or process of developing an opinion of value rendered by a professional appraiser. In preparing an appraisal, the appraiser, through research into appropriate market areas; assembly and analysis of market data; knowledge and experience, seeks to provide objective, impartial, and unbiased opinions of values for properties being appraised. Appraisers provide assistance to those who own, manage, sell, lend money and invest in real property.
Real estate appraisers play an important role in our society and provide various services to their clients. Appraisers develop opinions of value for various types of property and are often key players in decisions involving real estate. In the U.S. appraisers must complete minimum state licensed or certification requirements in order to provide valuation services to federally regulated lenders. Some appraisers have gone a step further in advancing their careers and increasing their knowledge by becoming members of appraisal organizations. Organizations like the Appraisal Institute, American Society of Appraisers and National Association of Independent Fee Appraisers provide support, and education leading to designations that go beyond state requirements. Like most professions, appraisal practice is governed by standards of conduct. Standards of appraisal practice are set forth in the Uniform Standards of Professional Appraisal Practice (USPAP) developed by The Appraisal Foundation.
Depending on experience, competency and knowledge, an appraiser may be able to provide an appraisal for the following intended uses:
- Estate planning and estate settlements
- Establishing a price at which to sell
- Divorce settlement
- Tax reporting
- Establishing a price at which to buy
- Establishing the terms of a lease
- Financial reporting
- Portfolio analysis
- Establishing just compensation in eminent domain proceedings
- Assist in making decision regarding financing
- Establishing fair partnership value
An appraiser may also provide the following services:
- Feasibility studies
- Supply and demand studies
- Expert witness testimony
- Land utilization studies
- Market rent studies
Some key questions to ask when hiring an appraiser
Listed below are a few questions that may help when deciding to use an appraiser.
- How long have you been an appraiser?
- Are you licensed or certified?
- Are you affiliated with any appraisal organizations?
- Are you familiar with the properties in this neighborhood?
- What types of clients have you done appraisals for?
- What level of experience do you have in this particular market?
- Have you had any formal complaints filed against you?
It should be noted that compensation for completing an assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of the appraisal.