PRIME REAL ESTATE SERVICES

As defined in USPAP, an appraisal is the act or process of developing an opinion of value. The valuation process is a systematic procedure the appraiser follows to answer a client’s question about real property value. In simple terms: A property appraisal is an unbiased opinion of the true value of a property at a single point in time that is performed by a certified professional appraiser. The appraiser uses 2 to 3 of the approaches to conclude an estimate of market value.

An appraiser provides an estimate of the value of a property based on a point in time (present, past or future) using the 3 methodologies (approaches) to value. 1. Sales Comparison Approach; compares recently sold and currently active listings based on location, condition, size, utility, and income(Rental Properties). 2. The Income Capitalization Approach; is used by investors to estimate market value of income generating properties. 3. The Cost Approach; is the sum of the value of the land and site improvements on the land, less any accrued depreciation. This method is used to estimate the cost of property compared to building it from scratch. The Cost Approach is based on the economic belief that informed buyers will not pay any more for a product than they would for the cost of producing a similar product that has the same level of utility. On the day of inspection the appraiser will begin with walking the property to determine any external factors that may exist. Then a walk-through of the interior to determine the general condition and finishes of the property and note any amenities of value in that market area. Often, the appraiser will photograph or sketch the property’s layout.

The main difference between a CMA and an appraisal by a certified appraiser is the level of analysis. A CMA is provided by a licensed real estate broker and usually consists of recent sales and currently active listings without any analysis to support the figure provided. An appraisal is provided by a state certified appraiser. That appraiser, at a minimum, has undergone rigorous studies and exams to perform the analysis that is critical to examining a property on a macro level. Appraisers use trends, market analysis, code of ethics, and carefully documented valuation methodology to determine an estimate of fair market value. The arguably the most critical difference; An appraiser is unbiased in their opinion of market value. A broker is typically motivated by the commission associated with obtaining a listing.

The client, known as the intended user, owns the appraisal and can authorize another user or several users to receive a copy of the report. The client is typically whomever orders the appraisal. For example: A lender orders an appraisal for the property located at 212 Smith St. The owners of the house, Thomas and Lorraine pay for the appraisal. The appraiser delivers the appraisal to the lender because they ordered it. However, the home owner is entitled to a copy of the report.

This is highly recommended. You are making an incredibly important decision with your finances. In today's market it is crucial to make an informed decision. Getting an appraisal will help in determining your offer and negotiating the contract price.

It all depends on the type of property and complexity of the assignment. Prime Real Estate Services is a cost competative firm. We strive to earn your business while keeping costs low.

Feel free to call us at 914-403-6906 or email us your inquiries at info@primerealestate247.com.