An appraisal is a professional appraiser’s opinion of value. The preparation of an appraisal involves research into appropriate market areas; the assembly and analysis of information pertinent to a property; and the knowledge, experience and professional judgment of the appraiser. 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.
At minimum, all states require appraisers to be state licensed or certified in order to provide appraisals to federally regulated lenders. Appraisers have fulfilled rigorous educational and experience requirements and must adhere to strict standards and a code of professional ethics. Qualified State Certified appraisers bring knowledge, experience, impartiality and trust to the transaction. In so doing, they help their clients make sound decisions with regard to real property.
Most appraisals are reported in writing, although in certain circumstances, an appraiser mayprovide an oral appraisal. A written appraisal report generally consists of: a description of the property and its locale; an analysis of the “highest and best use” of the property; an analysisof sales of comparable properties “as near the subject property as possible”; and informationregarding current real estate activity and/or market area trends. The value indicated by recentsales of comparable properties, the current cost of reproducing or replacing a building, and the value that the property’s net earning power will support are the most important considerations in the valuation of real property.