What is a real estate appraisal?
A real estate appraisal is the process of providing a fair and unbiased estimate of a property’s value. Appraisals are conducted by appraisers for various purposes, including facilitating property transactions, assisting in buying or selling property, helping mortgage lenders assess the value of collateral, and serving other needs such as taxation, litigation, estate planning, financial reporting, and insurance.
After conducting a thorough inspection, investigation, and analysis, appraisers present their findings in an appraisal report. This report includes the final value conclusion, along with the analysis and assumptions used during the appraisal. Appraisals can be performed for various types of properties, including commercial and residential real estate.
What does a real estate appraiser do?
Real estate appraisers collaborate with real estate agents, mortgage lenders, insurance companies, tax authorities, and individual property owners. They must provide an unbiased opinion on the value of a property. To do this, appraisers need to consider all relevant information about the property, understand market conditions, identify the purpose of the appraisal, conduct a property inspection, and use the appropriate appraisal methods before determining the final value.
Appraisers must ensure they have all necessary information to perform their analysis. This includes gathering data on the subject property (such as parcel size, building size, building age, recent sales, specified property use, current occupancy, and for commercial properties, income-producing capability, rent roll, and financial statements), comparable properties, and surrounding market conditions. Effective communication with the client is also crucial for addressing any correspondence and requirements.
What are the requirements and skills needed for a real estate appraiser?
A real estate appraiser must be familiar with the various approaches to appraising properties.
Appraisers should be proficient in tools such as CoStar, REIS/Moody’s Analytics, AcreValue, LoopNet, Crexi, MS Word, MS Excel, Argus, and other market research and report-writing tools like Valcre and Lightbox.
Appraisers are also required to conduct property inspections.
An interest in real estate, combined with strong analytical skills, good writing abilities, critical thinking, and effective verbal communication, is essential for a successful appraiser.