Are Real Estate Appraisals really necessary?
A real estate appraisal is necessary to determine the estimated market value of a house, condominium, commercial property, vacant land, etc. It is used to assist someone in making a decision. They may be considering purchasing, selling, insuring, or lending money on a house, condo, commercial property, or vacant lot. Appraisals are also used for tax purposes to estimate how much money a property owner has to pay in taxes.
What qualifies someone to be a real estate appraiser?
All states require appraisers to be state licensed or certified in order to provide appraisals to federally regulated lenders. Some states require appraisers to be licensed or certified to provide appraisals for other parties as well. To become licensed or certified, you must pass an examination that is administered by your state’s appraisal board.
How long does an appraisal take?
The physical inspection of the real property being appraised can take from approximately fifteen minutes to several hours, depending upon the size and complexity involved.
After the initial inspection of the property the appraiser spends time touring through the neighborhood or area. The purpose of this tour is to search for comparable sales (other properties that are similar to the property being appraised) that have sold within the last six months to a year or so. When the field work is finished, the appraiser completes the report at his office. The report can consist of a short form report (typically fewer than ten pages) to a long narrative report which can sometimes exceed a hundred pages. A short form report usually takes between three to six hours to complete. A narrative report can take weeks or sometimes even months, depending upon the complexity of the assignment.
What services do appraisers provide?
The role of the appraiser is to provide objective, impartial and unbiased opinions about the value of real property-providing assistance to those who own, manage, sell, invest in and/or lend money on the security of real estate.
What is valuation?
Valuation is the process of estimating market value, investment value, insurable value or another property defined value of an identified interest in a special parcel or parcels of real estate as of a given date
What is Market Value?
Market value or fair market value is the most probable price that a property should bring (will sell for) in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:
- The buyer and seller are typically motivated
- Both parties are well informed or well advised
- A reasonable time is allowed for exposure to the open market
- The payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto
- The price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
What rules must appraisers follow?
Appraisers are licensed and, by law, must follow the Uniform Standards of Professional Practice (USPAP). If appraisers do not follow USPAP, they can be disciplined by the state in which they are licensed Real Estate Appraisers Board and, ultimately, lose their license to practice.