What is an appraisal?
An appraisal is a professional opinion of the market value of an interest in real property, such as a home or office building, as of a specific date. Prepared by a qualified appraiser, it represents an independent and impartial opinion of value based on an analysis of all the relevant data.
Do I need an appraisal?
Appraisals are used by attorneys, accountants, lenders, insurance agencies, property owners, and any others who have any interest in the property being appraised. If you are just looking for an idea of the current value of your home, you can get a comparative market analysis from a local real estate agent. However, if you need an independent and impartial professional opinion of value for any kind of legal or transactional purposes, then you need an appraisal.
How does the appraiser determine market value?
There are three approaches appraisers use to value real property. They are the Cost Approach, the Sales Comparison Approach, and the Income Approach. The Cost Approach is what it would currently cost to replace or reproduce the improvements as of the date of the appraisal, after adjusting for deterioration and obsolescence. The Sales Comparison Approach compares the subject property to others of similar size, quality, and location that have sold recently. The Income Approach, used primarily for commercial properties, looks at what a prudent investor would pay based on the net income produced by the property.
Where does the appraiser get the data used in the appraisal?
The appraiser takes information from a wide variety of sources, including the Multiple Listing Service, tax assessor's records, real estate professionals, county courthouse records, private data vendors, interviews with sellers and buyers, pooled appraisal data banks, personal knowledge, and in-house files from previous appraisals.
How long does an appraisal take?
A residential appraisal can frequently be completed within two to three days after the inspection of the property. Commercial appraisals generally take longer, frequently from 4 to 12 weeks, depending on the complexity of the property being appraised.
Who does the appraiser work for?
The client is whoever orders the appraisal report and intends to use the appraisal for the stated purpose and use of the report, regardless of who actually pays for the appraisal. For example, most residential appraisals are ordered by the banks or lenders making a loan on the property, even though the buyer applying for the loan will actually pay for the appraisal. In these cases, the bank or lender is the client, although in these cases the buyer is entitled to a copy of the report.
What qualifications are appraisers required to have?
Real estate appraisers are certified by the state as either Residential or General (residential and commercial) Real Estate Appraisers. Certification is achieved through a vigorous program of educational requirements and supervised professional experience. State certified appraisers must adhere to strict industry standards and a professional code of ethics (USPAP) as directed by the Appraisal Foundation.
What is USPAP?
USPAP is the Uniform Standards of Professional Appraisal Practice, the code of ethics written by the Appraisal Foundation. All professionals are required to abide by USPAP standards. All appraisals completed by Quantum Appraisals are USPAP compliant. Current USPAP standards are available online at http://www.uspap.org/2010USPAP/index.htm
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