Appraise-Value.com is the platform that connects lenders, buyers and sellers, and estate planners with licensed and certified local property valuation experts.
Globalization of Standards
Location, views, presentation (curb appeal), materials used, lot size, zoning and permit compliance, replacement cost, recent nearby sales, and amenities such as garages, views, and pool all contribute to a property's value. Appraisals are conducted by "appraisers", "valuers", or "valuation surveyors". All valuations are an expressed opinion. Most, but not all jurisdictions require appraisers be licensed or certified. The UN's drive to globalize everything gave rise to International Valuation Standards (IVS), which facilitates global real estate appraisal standards.
MoreMethods of Valuation
* Cost ("Summation", "Replacement") - the land value + the depreciated value of any improvements (structures). * Sales comparison ("Comparative") - recent sales of nearby properties in similar condition and with similar features. * Income ("Value-in-Use", "Investment Value") - the net present value (NPV) of a cash flow where the income is calculated using revenue multipliers or cap rates, e.g., Net Operating Income (NOI) = Gross Potential Income (GPI) - Vacancy Factor and Collection Loss (Effective Loss) - Operating Expenses (excluding debt service, income taxes, and depreciation).
BPOs and AVMs
A broker's professional opinion (BPO) is a less-detailed but still reasonably valid estimate of valuation. A "drive-by" BPO considers curb appeal, neighborhood data, amenities, and recent comparable sales. An "interior" BPO adds consideration of appliances, layout utility, and measures room dimensions. Lenders seeking a second opinion or "review appraisal" often order a BPO. And finally, the automated valuation model (AVM) found on some Web sites estimates value with various algorithmic computations. AVMs are the least accurate of methods.
Inspections
While an appraiser determines an opinion of a property's value, an inspector determines the current "condition" of a structure. A general property inspection is a limited, non-invasive examination conducted by a general contractor or certified inspector - who may subsequently recommend a second opinion by a specialist, such as a roofer, a foundation expert, a wood destroying pest expert, a heating-ventilation-air conditioning (HVAC) expert, or a geological soils expert. We recommend that inspection reports be shared with the appraiser to append to the appraisal report.