What is an appraisal and how is it created?

Appraisals are completed for various reasons.

 

• Estate Planning
• Divorce Settlement
• Refinancing a home
• Purchasing a home
• IRA planning
• and the list goes on

 

An appraisal is the act of developing an opinion of value; or an opinion of value. An appraisal can be expressed as a specific amount, as a range of numbers, or as a relationship to a previous value opinion or numerical benchmark.

An appraiser will analyze three differing approaches (Sales, Cost, and Income) for a properties value and place weight (emphasis) on the most appropriate approach for the assignment. The appraiser will collect relevant data from available sources creating a “workfile”. This workfile which the appraiser retains for at least 5 years is the actual appraisal. Guidance as to the content of the work file is outlined in The Appraisal Foundations USPAP (Uniform Standards of Professional Appraisal Practice). Following the creation of a workfile the appraiser will create a report. The report is what a consumer or client ordering the appraisal will recieve. This report can be either a form created by FNMA and/or appraisal software vendor or a narrative report. Either type of report will have a similar work file.

If you have further questions on the appraisal process or in need of an appraisal please contact us at 480-595-0188.