1) The Appraiser formulates an objective, independent opinion about the value of a piece of real estate.
- Appraisers work either independently or on a fee-for service basis, and generally should have no interest in the value of the subject property.
- A code of ethics and standards mandates that Appraisers reveal to their client any interest they may have in the subject property. This ethics code is required as part of the licensing process for certified Appraisers.
2) An Appraisal is an estimate of value of the subject property based on an investigation of numerous factors including:
- The Property’s Size, Location, Condition.
- Economic Factors (Interest rates, Employment).
- Environmental Factors (Presence of Pollutants on the Land or Nearby).
- Demands for the particular type of housing (e.g., senior housing).
3) Why Do An Appraisal?
Appraisals are used to guide people in negotiations and other business decisions.
- Buyer and Sellers of Real Estate use Appraisals to determine a fair asking price for the property.
- Mortgage Lenders (e.g., banks) require appraisals if the property is being used as collateral on a loan.
- Appraisals are also done for Estate Valuation, Exchanges of Ownership, Court Proceedings (e.g., bankruptcy, divorce), Eminent Domain, Property Tax Assessments, and other tax reasons.