An appraiser can provide a buyer or seller with an estimated value of a piece or property or real estate. Through the use of standardized methodology, appraisers, who are often licensed by state, provide independent valuation that is critical for the selling and buying process.
Typically, an appraiser will provide a report which details information about a parcel or property. They often work for the owner or lender in preparation for setting a selling price. To standardize the process, a preprinted form is typically used. While there are several different types, the most popular is the Uniform Residential Appraisal Report. This form was developed by the USPAP (Uniform Standards of Professional Appraisal Practice. In cases where the federal government is involved, for example funding provided by a federal bank, this form must be used.
The appraisal will detail several specific areas of concern. These include:
-Date
-Property location (via legal descriptions)
-Property purpose (residential or commercial)
-Appraisal methodology
-Conditions and assumptions
-Estimated Value
-USPAP compliance
Obviously, the methodology utilized during the appraisal process is important. There are several different methods that can be used. An appraisal may include a CMA (competitive market analysis) and BPO (broker’s price opinion).
During the appraisal process, the appraiser will spend a great deal of time collecting data. Information regarding the general area is collected as is information regarding the specific piece of property or real estate itself. The appraiser will also take into consideration the current market environment and other factors to determine a fair and unbiased appraisal or value for the property.
The resulting appraisal report will be utilized by an owner to develop an asking price or by a buyer during the mortgage approval process. The information will also be used by government agencies during the process of tax adjustments.