Appraisal 101

An appraisal is a professional opinion of value based on market data & analysis of the micro market. The preparation of an appraisal involves research into appropriate market areas; the assembly and analysis of information pertinent to a property; and the knowledge, experience and professional judgment of the appraiser.

The role of the appraiser is to provide objective, impartial and unbiased opinions about the value of real property and to provide assistance to those who own, manage, sell, invest in and/or lend money on the security of real estate. Florida requires appraisers to be state certified in order to provide appraisals to federally regulated lenders.

Appraisers have fulfilled rigorous educational and experience requirements and must adhere to strict standards and USPAP code of professional ethics. Qualified State Certified appraisers bring knowledge, experience, impartiality and trust to the transaction. In so doing, they help their clients make sound decisions with regard to real property.

Most appraisals are reported in writing, although in certain circumstances, an appraiser may provide an oral appraisal. A written appraisal report generally consists of: a description of the property and its locale; an analysis of the "highest and best use" of the property; an analysis of sales of comparable properties "as near the subject property as possible"; and information regarding current real estate activity and/or market area trends. The value indicated by recent sales of comparable properties, the current cost of reproducing or replacing a building, and the value that the property's net earning power will support are the most important considerations in the valuation of real property.

The following questions would be appropriate when selecting an appraiser:

  • Are you certified in the state you live?
  • How long have you been in practice?
  • What level of experience do you have in this particular type of property?
  • Are you familiar with property in this neighborhood?