An appraiser, also called a real estate appraiser, is trained and qualified in providing an estimate of the worth of a property, such as a home or business. He or she has an extensive knowledge of the market and performs a thorough analysis in order to create an accurate appraisal of a property's value. A qualified professional will always present the information in a clear, written report.
The contents of an appraisal report include the estimated value of the property, the date, the purpose of the appraisal and the signature of person who performed the analysis. It must also identify the address of the property, and maps or photographs may also accompany the report.
An appraiser can estimate property value in one or more different ways. In a Direct Comparison, he or she researches what a buyer would get for a similar property, comparing real property listings and actual selling prices.
In a cost approach, the appraiser calculates what the cost of building a new structure like the appraised one would be under current market conditions. He or she takes land value estimation into account, and considers accumulated depreciation as well.
The Income method of appraisal considers the maximum amount of income a business or other property could produce. The appraiser calculates the operating income to help arrive at the value estimation. Emphasis is placed on what the income could be if the property was managed to its maximum potential.
Purposes for hiring an appraiser vary widely. An appraisal could be required for insurance reasons or as part of a divorce agreement as one element of the division of assets. An appraisal may also be needed when a donation to a charity is deemed tax deductible, for estate or gift tax, or for a liquidation.
The value determined in the appraisal often depends on the purpose of the analysis. For example, the appraiser may calculate fair market value in some situations and may apply liquidation value in others. In the US, each state has different requirements for the licensing of real estate appraisers, so people who are interested in this job should contact their individual state appraisal board or office for specific information.
