FAQs
What is an appraisal?
Do I need an appraisal?
How does the appraiser determine market value?
What factors does the appraiser consider?
What’s included in a typical appraisal report?
Besides the inspection, where does the appraiser get data?
How much does an appraisal cost?
Who does the appraiser work for?
What is USPAP?
What qualifications are appraisers required to have?
What is an appraisal?
An appraisal is the act or process of developing an opinion of value for real property which is in most cases a written document.
Do I need an appraisal?
If you’re buying or selling, insuring or making a claim, financing, grieving property taxes, probating a will, settling a lawsuit or divorce, involved in bankruptcy, dissolution, or other litigation.
How does the appraiser determine market value?
Three common approaches, all derived from the market are used. The Cost Approach is what it would cost to replace or reproduce the improvements as of the date of the appraisal, adjusting for deterioration and obsolescence. The Comparison Approach compares the subject properties to others of similar size, quality, and location that have sold recently. The Income Approach, used primarily for commercial properties, looks at what a prudent investor would pay based on the net income produced by the property.
What factors does the appraiser consider?
For most properties style, age, overall condition, size and quality of construction are important. Other factors that influence market value, such as neighborhood, location, proximity to schools, zoning, comparable sales, design, and floor plan are also considered. With regard to income-producing properties, more complex criteria including quantity, quality and durability of the net income stream (income after all expenses) condition of improvements, and replacement costs are considered as well.
What’s included in a typical appraisal report?
Industry standards accept a narrative report on all commercial properties. All the reports contain facts and analyses of the subject property, the neighborhood, and the market. Most contain exhibits, including photographs of the subject and comparable properties, a detailed scaled sketch of the subject, a map showing the subject in relation to the comparable data and a flood map showing the subject. All appraisal reports contain a Statement of Limiting Conditions and Appraiser’s Certification.
Philadelphia Suburban Realty Appraisal Group provides our clients with three different types of reports depending on the extent of their need to have detailed information. The more detailed the report the higher the more time and analysis is needed hence the cost increases.
Sample Self-Contained Report Format
A written appraisal report prepared under Standards Rule 2-2(a) of the Uniform Standards of Professional Appraisal Practice. A self-contained appraisal report sets forth the data considered, the appraisal procedures followed, and the reasoning employed in the appraisal, addressing each item in the depth and detail required by its significance to the appraisal and providing sufficient information so that the client and the users of the report will understand the appraisal and not be misled or confused.
Sample Summary Report Format
The summary format is the most used of the formats. The summary appraisal is a written report prepared under Standards Rule 2-2(b) or 8-2(b). The report contains a summary of all information significant to the solution of the appraisal problem. The essential difference between a self-contained appraisal report and a summary appraisal report is the level of detail of presentation.
Sample Restricted-Use Report Format
The restricted use appraisal report is a written report prepared under Standards Rule 2-2(c), 8-2(c), or 10-2(b). The restricted use appraisal report should contain a brief statement of information significant to the solution of the appraisal problem. A restricted report may be depended upon only by the client, thus it is not allowable for use when a third party, such as the IRS, will be required to depend upon its content and analyses. This format would be appropriate for non-contentious estate matters, as well as internal decision making purposes. The restricted report format is the most economical of formats. Further it can be tailored to meet the client’s needs.
Besides the inspection, where does the appraiser get data?
The appraiser takes information from a wide variety of sources, including the Multiple Listing Service, tax assessor’s records, real estate professionals, county courthouse records, private data vendors such as COMPS.COM, interviews with sellers and buyers, appraisal data base, personal knowledge, and in-house files from previous appraisals.
How much does an appraisal cost?
The cost varies primarily with the complexity of the assignment as well as its location and the timing requirements of the client. Please contact us for a free quotation.
Who does the appraiser work for?
If you mean “Who can influence the outcome?” the answer is no one. Professional ethics (USPAP) demand the same outcome — an unbiased, independent and accurate appraisal — no matter who orders or pays for it. If you mean, “Who does the appraiser report to?” the answer is to the party who ordered the report, regardless of who pays for it. Moreover, the appraiser will not discuss the appraisal with anyone other than the person who ordered it, unless otherwise instructed. If your lender ordered the report, you are entitled to a copy and it should be requested prior to settlement.
What is USPAP?
USPAP is the Uniform Standards of Professional Appraisal Practice, the code of ethics written by the Appraisal Foundation, which Congress authorized as the source of appraisal standards and appraiser qualifications. By relying on USPAP, an appraiser can produce appraisals — analyses, opinions, and advice — in a manner meaningful to you and not misleading in the marketplace. The current USPAP is available online.
What qualifications are appraisers required to have?
Most states require that all real estate appraisers are state licensed or certified and have fulfilled education and experience requirements. They must adhere to strict industry standards and a professional code of ethics as mandated by the Appraisal Foundation. All appraisers at Philadelphia Suburban Realty Appraisal Group are state licensed and hold the highest certifications in their categories. Moreover, one of the principals holds an MAI Designation from the Appraisal Institute.