What is an appraisal?
An appraisal is defined as an opinion of value by professional appraisal standards (Uniform Standards of Professional Appraisal Practice, see below). Appraisers consider appraising to be both an art and a science. You probably have an opinion of the value of your home. Your opinion and a professional appraiser’s opinion may be the same. But appraisers are required to be objective and impartial in their analyses and opinions. A professional appraiser has been trained in appraisal methodology and looks at how your home compares with sales and listings of homes similar to yours, considers many factors such as price trends and proximity to a freeway, complies with professional standards, and usually completes a written report.
A professional, written opinion of a property’s estimated market value by an impartial party. The value is estimated based on the property’s style and appearance, construction quality, usefulness, and the value of similar properties in the same or nearby community that recently have been sold. An appraisal is NOT a warranty of value and does not indicate that a property is a habitable, sound, etc.
An appraisal is a thought process leading to an opinion of value. This opinion or estimate is arrived at through a formal process that typically uses the three ”common approaches to value”. They are the Cost Approach – which is what it would cost to replace the improvements, less physical deterioration and other factors, plus the land value. There is the Sales Comparison Approach – which involves making a comparison to other similar, nearby properties which have recently sold. The Sales Comparison Approach is normally the most accurate and best indicator of value for a residential property. The third approach is the Income Approach, which is of most importance in appraising income producing properties – it involves estimating what an investor would pay based on the income produced by the property.
An appraisal is a professional estimate of the value of one’s property. The item to be appraised can be a small individual piece, such as jewelry or artwork, or something larger, such as a home or business. In many cases an appraisal is necessary before a piece of artwork, jewelry or even a home can be insured. Before a mortgage or loan is approved for a home, that home will also need to be appraised. This is important in order to make sure that the insurance or loan amount is equal to the value of the property. There are various areas in which an appraisal can be made: Personal Property Appraisal: This includes items such as jewelry, fine china, artwork, pottery, antiques and other heirlooms. Real Property Appraisal: This consists of assessing the value of real estate. Mass Appraisal: This combines personal property and real property appraisal. Business Valuation: This type of appraisal assesses the value of a business including equipment, services, logos and goodwill — both tangible
