What is an appraisal?
A definition of an appraisal : An appraisal is an estimate of value, based on a process which leads to an opinion of value. It is arrived through a formal process which typically involves three approaches to value.
Cost Approach: This is the land value, plus replacement value of the improvement minus depreciation, and other factors.
Sales Comparison: This involves the comparison of similar properties, nearby, and recently sold. Factors including market conditions of values, (increasing or decreasing values), sales concessions, condition, amenities, and additional factors are all considered. This approach is typically considered the most reliable. The sales comparable approach involves extensive research and is narrowed down through comparison and analysis.
Income Approach: This approach is of most importance in appraising income producing properties. It involves estimating what an investor would pay based on the income produced by the property.
Appraisals are a complete process involving solving the puzzle of what is the value of the property, given many factors. Appraising is often called an art. Many years of experience and education is involved in becoming an appraiser. Licensing and continuous certifications expands the appraisers knowledge base.
Familiarity with the location is a very important factor. We cover appraisals in Broward county.
Filed under: Main — admin @ June 9, 2008 7:47 am -->