Appraisal
Appraisal is the process of determining the fair market value of
an asset. For example a mortgage appraisal will estimate the value
of a property based of its quality, appearance and value of
comparable properties sold on the market.
The real estate appraisal is done to place a market value on land or
a home; this is done by a licensed appraiser and will depend on the
local property market what the value is, even though no two
properties are alike.
There are different types of appraisals that can be done; there is a
fair market value, a foreclosure value, a distressed sale value and
investment. When an appraisal is done one of the ways that the fair
market value is calculated is by data collected on recent sales of
properties in the area that are comparable to the property being
appraised. These sold properties while comparable are not identical
and the price will be adjusted up or down depending on the current
property being appraised.
The appraisal of a property is normally done prior to putting the
property up for sale in the current market, so that there is an
accurate basis for the calculation.
The real estate person that does the appraisal is certified and has
the market analysis of the current properties. This is what they use
in arriving at an appraisal amount for a given property in an area,
whether it is undeveloped land, land with a single structure, land
with a business building, or land with a multi living dwelling.