Real Estate Appraisal

The process of Real Estate appraisal is part of any real estate transaction. The fair market value must be determined in a fair manner. All types of real estate from a small empty lot to an enormous estate have individual factors that need to be taken into account before assigning a value. Other features such as location have much to do with the overall value of a property.

Professionals with expertise in valuating properties and real estate are called Real Estate Appraisers in the United States and are called a Property Valuer in Great Britain. While their processes are slightly different, the need for appropriate licensures and certifications is almost universal. There might be some areas where a license is not needed, but certainly, experience in the field is a key factor to become successful in this field.

There are many ways to assess the value of a property. Market Value is a real estate term that indicates an estimated price based upon what a reasonable buyer would pay for it as long as both the buyer and seller were knowledgeable and acted under their own cognizance. Investment value is what an investor might pay for the property. This amount is usually more than Market Value, but if there is a potential to make a reasonable profit from 'flipping' the property, it is good to appraise it at Investment value. Liquidation value is the appraised value when the seller is being forced to sell the home due to the filing for bankruptcy protection or when they cannot meet the bank loan terms. Liquidation value is calculated as what the property can bring in order to meet the terms or conditions of the judge in the case.

The term market value can be looked at like the term retail price. Just because it is listed at a specific price doesn't mean you will be able to sell the property or item for that listed price. A property can be sold at a lower price than market value if the parties in the transaction agree to a lower price. A higher price might be negotiated if the potential buyer sees investment value in the property. This happens sometimes with a person who decides to buy a property bordering his or her property. The prospective gain of contiguous land will raise his or her property value.

Before an appraiser is sent to perform the appraisal, sometimes a home inspector will be sent out. The report generated by the home inspector is normally available for the appraiser to use to formulate the appraisal amount. There are several appraisal organizations in the United States that you can check to make sure that your appraiser has the sufficient expertise to conduct the appraisal in the best way.