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The Appraisal Process
The appraisal process starts with
a physical inspection of the property
being appraised. Number of bedrooms
and bathrooms are important to ensure
that they really exist and are in
reasonable condition. Also, the inspection
ensures the proper square footage
and layout of the property by including
an illustrative drawing. The inspection
takes into consideration obvious defects
to the structure of the property.
This affects the value negatively.
This may included a leaky roof or
hole in the wall.
Once the property has been inspected,
the process calls on three approaches
of property value. The cost approach,
sales comparison approach, and income
approach.
The cost approach is a method based
on the replacement cost (new) of improvements,
plus the market value of the site
(land). For more information on the
cost approach, income approach, and
sales comparison approach, please
refer to our
Real Estate Appraisal section.
In brief, appraisal process calls
on the income capitalization approach
for income producing properties and
the sales comparion approach for owner
occupied homes.
In summary
Licensed appraisers us this approach
as a guideline to a satisfactory appraisal
report. Special consideration is placed
on a properties improvements.
On occasion, there is a great deal
of pressure on appraisers by individuals
in the real estate profession to appraise
a property at a certain price. Appraisers
must be careful with these unethical
practices. They must know
when to say no to certain realtors,
mortgage brokers, and others.
Additional Key Terms Include
Appraiser
Process Explained - Certified
and Licensed Appraiser - Learn
how the appraiser process is performed.
A licensed real estate appraiser uses
his or her knowledge of the real estate
market to derive at property value.
Real
Estate Appraisal - Explanation
on the Inspection and Report -
Read how a real estate appraisal is
used to develop an opinion of value.
Real
Estate Agent - Realtor Guidelines
and Ethical Behavior - Explanation
on real estate agents and how they
must acquire a real estate license
to represent a buyer or a seller in
a real estate transaction.
Real
Estate Investing - Information
on Foreclosures- Explanation on
real estate investing and the purchase
of real estate for profit.
Commercial
Real Estate and The Real
Estate Market - Learn more about
commercial real estate and how it
can be bought or sold in the real
estate market.
Real
Estate Development - Modern
Architecture and Structure - What
is real estate development. Learn
how developers are usually in the
form of a company such as a corporation,
but can also be an individual or partnership.
Real
estate law - Including The
Real Estate Contract - Read up
on how real estate laws vary significantly
between jurisdictions.
Real
Estate License - Appraiser,
Realtor, and Mortgage Broker -
Explanation on mortgage broker, real
estate agent, and appraiser licenses
and how they must be updated with
continuing education.
Real
Estate Market - Updates on
the Condition of the Market -
How do the real estate agent, property
appraiser, and mortgage broker affect
the market.
Real
Estate Appraiser Jobs - Trainee
and Experienced Appraisers - How
do you become a property appraiser?
Click here for further information.
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