Some commonly asked questions
About Real Estate Appraisers and Appraisals
Who are real estate
appraisers, and what do they do? Here are some answers!
What is an appraisal?
An appraisal is a professional
appraiser’s opinion of value. The preparation of an appraisal involves research
into appropriate market areas; the assembly and analysis of information
pertinent to a property; and the knowledge, experience and professional judgment
of the appraiser.
What is the role of the
appraiser?
The role of the appraiser is to
provide objective, impartial and unbiased opinions about the value of real
property — providing assistance to those who own, manage, sell, invest in
and/or lend money on the security of real estate.
What qualifications must
appraisers have?
States require appraisers to be
state licensed or certified in order to provide appraisals to federally
regulated lenders. However, appraisers who become Designated members of the Appraisal Institute typically
surpass the minimum state requirements. They fulfill rigorous educational and
experience requirements and must adhere to strict standards and a code of
professional ethics. The Appraisal Institute currently confers the MAI designation on appraisers who are
experienced in the valuation of commercial, industrial, residential and other
types of properties. The SRA
designation is held by appraisers who are experienced in the analysis and
valuation of residential real property. The AI-GRS designation is held by appraisers who are experienced in
general appraisal review, while the AI-RRS
designation is held by appraisers who are experienced in residential appraisal
review.
How do well-credentialed appraisers add value to real estate
transactions?
They bring knowledge,
experience, impartiality and trust to the transaction. In so doing, they help
their clients make sound decisions with regard to real property.
What are the components of an
appraisal report?
Most appraisals are reported in
writing, although in certain circumstances, an appraiser may provide an oral
appraisal. A written appraisal report generally consists of a description of
the property and its ocale, an analysis of the “highest and best use” of the
property, an analysis of sales of comparable properties “as near the subject
property as possible,” and information regarding current real estate activity
and/or market area trends.
What are the most important
considerations in the valuation of real property?
The value indicated by recent
sales of comparable properties, the current cost of reproducing or replacing a
building, and the value that the property’s net earning power will support are
the most important considerations in the valuation of real property.
What is the range of services appraisers
provide?
- Estate planning and estate
settlements
- Tax assessment review and advice
- Advice in eminent domain and
condemnation property transactions
- Dispute resolution—including
divorce, estate settlements, property partition suits, foreclosures, and zoning
issues
- Feasibility studies
- Expert witness testimony
- Cost/benefit or investment
analysis, for example, determining the financial return on remodeling
- Land utilization studies
- Supply and demand studies
When hiring an appraiser, what
types of questions should I ask?
The following questions would be appropriate:
- Are you licensed or certified in
the state in which you live?
- What professional designations do
you have and from what groups?
- How long have you been in
practice
- What level of experience do you
have in this particular market and with this type of property?
- Are you familiar with property in
this neighborhood?
- What types of clients have you
had (homeowners, estates, lenders, relocation companies)?
When in need of an appraiser, why
should I hire a Designated member of the Appraisal Institute?
Appraisers who hold Appraisal
Institute professional designations have met stringent educational
requirements, have considerable professional experience and are required to
adhere to strict standards and ethics of professional practice that exceed
those required by state or federal law. Moreover, many Appraisal Institute
designated members participate in continuing education programs — including
those that emphasize the most up-to-date valuation techniques — making them the
preferred source for high-quality appraisal services.
Appraiser/Engineer Carlos Miranda currently holds the MAI and SRA Designations of the Appraisal Institute, among many others!
