Real estate appraisals are the processes of valuing real property, and can be also referred to as a property valuation. The usual goal of the appraisal process is to arrive at the properties market value, fair value, fair market value, or other value as determined by the client. There is a general outline and scope, which the appraiser must follow in developing the appraisal report as federally mandated by USPAP (Uniform Standards of Professional Appraisal Practice) and enforced by the State Appraisal Board. As developed in the appraisal, the reconciled value conclusion is typically the amount of money a property would convey at, dependent on the value definition applicable.
It is imperative to use appraisers that are certified in the state in which the subject property is located and has sufficient knowledge and experience to comprehensively understand the property and the external influences. In the Commonwealth of Pennsylvania, it is illegal for a non Pennsylvania State Certified appraiser to perform a real estate appraisal. Additionally, only a state certified General real estate appraiser is legally qualified to appraise other than residential properties in Pennsylvania. A “General” appraisal certificate is the highest appraisal certificate an appraiser may obtain in Pennsylvania. Richard Lam has both a General Certificate in the Commonwealth of Pennsylvania and has experience appraising a diverse range of properties in southeastern Pennsylvania since 1986. An accurate and supportable real estate appraisal of a property’s value has historically been proven to be most reliable when performed by a properly qualified and significantly experienced real estate appraiser such as Richard Lam.
Generally, Appraisal Reports Contain Details Of The Following:
- Comprehensive identification of the subject property
- Scope of the assignment
- Evaluation of the general real estate market in the area
- Physical description of the subject property & the subject site with analysis
- Analysis of issues that may impact the value of a subject property (location, access, etc.)
- Side-by-side comparisons of recently sold similar properties
- If appropriate, develop an income stream and accordingly capitalize the net income into a value conclusion
- If appropriate, develop a cost to reconstruct the subject improvement while adjusting for applicable depreciation
- In a logical and supportable methodology, reconcile a dependable value conclusion
Appraisals may be for existing properties as of the date of inspection (As Is); retrospective appraisals based on a present inspection but a prior/historical date of value; or a hypothetical appraisal that is based on the present date but dependent on proposed changes as if they were in effect as of the present date (Per Plans & Specs).
Although Appraisers Perform Inspections, Appraisals Are Not Considered “Property Inspections”
While appraisers are required to alert the reader of an appraisal of potential concerns and deficiencies within the property or externally influencing the subject that the appraiser observes, an appraiser is typically not properly qualified to render an absolute opinion and may advise the reader of the appraisal report to seek an opinion of a duly qualified professional – i.e. an engineer, architect, asbestos professional etc.
