'Appraisal' is explained in detail and with examples in the Real Estate edition of the Herold Financial Dictionary, which you can get from Amazon in Ebook or Paperback edition.
Appraisals are professionally done estimates of a property’s real value. These are conducted by appraisers. Many things can have an appraisal done on them, including smaller items like artwork or jewelry, as well as larger things like businesses, commercial buildings, or homes.
Appraisals are commonly required before many different transactions can be performed. In advance of getting a house, piece of jewelry, or an artwork insured, appraisals must be performed. Homes and offices have to be appraised for insurance, loans, and tax purposes. Appraisals ensure that these loans and insurance policies are comparable to the property’s tangible market value.
Several different types of appraisals can be performed. Real property appraisal involves properly estimating Real Estate value. Personal property appraisal involves determining the worth of valuable individual objects like expensive china, jewelry, pottery, artwork, heirlooms, and antiques. Mass appraisals merge real property and personal property appraisals into a single appraisal. Business value appraisals consider all of the valuable tangible and intangible assets that a business owns, including logos, services, equipment, property, inventory, other assets and goodwill.
Perhaps the most commonly used type of appraisal is a home appraisal. Home appraisals prove to be professionally done surveys of a house to come up with an opinion or estimate of the home’s value on the market. These kinds of appraisals are usually performed for banks that are considering the approval of a loan for a person purchasing a home. Such home appraisals turn out to be detailed reports. These cover many things including the home’s neighborhood, the house’s condition, how rapidly area houses sell, and what comparable houses actually sell for at the time.
Such a home appraisal could similarly be done for a replacement value for insurance purposes or as a sales comparison in marketing a home, as well. Cost and replacement appraisals determine what the actual cost to completely replace your home would be if something destroyed the house. This type of appraisal is most often employed for new houses. Sales comparison appraisals more often examine various additional properties within your house’s neighborhood to determine at what price they are presently selling. The appraiser will then determine how such houses compare and contrast against your particular home.
Home appraisals commonly cost in the range of from $300 to $500 when people decide to order one done themselves. Such appraisals are not often accepted by banks. They will want to have their own contracted appraiser make the estimate in order to get a more independent number that they trust.
Home appraisers are always licensed by the state in which they operate. The highest of ethical standards are demanded of them. Their sole purpose is to act as an independent third party who will give their truthful opinion of a home’s market value. Appraisers are not supposed to be associated with any party that is involved in the selling of a home.