Real estate appraisals are an opinion or estimate of the property value. There are many factors in determining the value of a property, so it is best to leave this area to someone that is qualified to value real property, determining the values of a property is one of the first steps in buying and selling real estate. Determining who is qualified is relatively easy to do several organizations hold members to standards that other local organizations do not. The Appraisal Institute and The National Society of Real Estate Appraisers. These organizations hold their members to very high standards. Classes and certifications are part of a continuing education requirement. The ethical standards that members are required to stick to are high and therefore, …show more content…
Appraisals serve several other important needs as well, such as, determining a reasonable offering price, estate tax and planning, land valuations and for tax and insurance purposes. Once the valuation is completed, an "Appraisal Report" that details the results of the procedure are sent to the bank or lender for review, you can also request a copy too, you paid for it. These reports presented in a number of ways, such as an oral, written, letter or even as a form that is required by the lender. Residential appraisals are generally sent using a standard "Uniform Residential Appraisal Form"; this makes it easier for lenders to review the valuation reports quickly. The Uniform Residential Appraisal Form contains areas such as; Neighborhood, Improvements, Interior, Site and the Valuation Section that includes the method of appraisal that was used, Market Data Analysis that allows the appraiser to compare similar properties in the area. Photos are usually required in an appraisal and an addendum is attached showing various views of the area, maps and identifying information about the property's …show more content…
The first is "Cost Approach" this determines the replacement value of the land and structures at today's rates, less depreciation. Price Method is the primary approach to estimate property value. This method analyzes recent selling prices of properties in the area using comparables to value properties. In many cases, appraisers use more then one method to determine the property value. The valuation, quite commonly, came in at the exact amount of the contact price; this benefits the lender, normally the one that decides which appraiser to use, by doing this the appraisers reward would be more business from the lender. Appraisals are merely estimations of the property value, and do not determine the current market rate. Market rates indicated through inspections that guarantee the conditions, or imply warranties regarding the condition of the property. Appraisals are not foolproof, while somewhat complex; the true value depends on the condition of the property, current market conditions and other