Many residential appraisals don’t require the application of the cost approach, but there are situations where separate value opinions for land and improvements are necessary. In certain circumstances, the sales comparison approach is hampered by a shortage of sale properties that are truly comparable to the subject. Experienced appraisers recognize that a peculiar improved property […]
Appraisals of the same property by different appraisers are rarely the same. Differing value opinions are usually a result of various factors. When an appraisal user encounters contrasting value conclusions for one property, they can decide— by considering several variables — which conclusion is most reliable.
What is the process when private real estate is needed for public projects? ‘Eminent domain’ is the label frequently used to describe that process, and its basis lies in the U.S. Constitution. All U.S. states, including Massachusetts, have their respective statutes regarding the state taking private real property. Although eminent domain’s application has expanded in
Agents, investors, property owners and anyone riding on the results of an appraisal want the value to come out the way they expect, and the way they think it should, but is that how high-risk financing decisions should be made? Who is most qualified to evaluate a subject property and select the best comps based
The difference between construction cost and value is a central question in any appraisal assignment. Appraisers use several processes to estimate value. One of these is the cost approach, which takes into consideration the actual cost of building a structure similar or identical to the one under study. But other approaches to value often do
Appraisers have nearly unlimited possibilities in how they report the results of appraisal assignments. These choices could be oral appraisal reports, written appraisal reports, limited written appraisal reports, or many standardized report forms. The appropriate appraisal report format is determined by the appraiser and the client, considering the appraisal’s intended use and specific requirements of
Most improved real properties and many vacant tracts can only be sold subject to existing easements. Appraisers identify existing easements and consider their effect on value whenever a market value definition is part of an assignment. Easements and rights-of-way often influence how real property can be used and may even affect a property’s ownership cost.
The appraisal process includes the income approach to estimate the value of a property that an investor would ideally purchase for its annual income. The income approach assumes a relationship between a property’s average net income and the price an average investor would pay for the property. The first step to defining that relationship is
Suppose you paid for an appraisal when you refinanced your property a couple of years ago. Now, your real estate taxes have taken a big jump. The question then becomes, can you use that previous appraisal to apply for a tax abatement? Or, perhaps, you work for a financial institution that is reviewing a property
It’s standard procedure for most commercial lenders to request all three approaches to value—sales comparison approach, income approach, and cost approach—be undertaken during an appraisal. Usually, there is a stipulation that an approach may be excluded from the valuation if such an approach is deemed dispensable. This omission can be a point of conflict between
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