RES 301 Appraisal Industry Week 5 Final Paper
A real estate appraisal refers to an opinion as to the value of the property which is being appraised. The value is determined by a licensed Real Estate Appraiser who utilizes the current housing market values to determine such an opinion. Real estate is a diverse industry, and not all properties are identical. Property may vary from vacant land, condominiums, and single family homes to multi-million dollar estates or commercial real estate. The same two floor plans also experience differing values from one city to the next. Some of the most obvious factors in determining a property value are the location, size, and age of the structure on the property. This paper will review the appraisal process along with some of the ethical considerations real estate appraisers face such as the legal and financial consequences of real estate appraisals.
The Valuation Process of an Appraisal
The process of developing an appraisal report is often viewed as problem solving with the ultimate goal being an educated estimation of the value of the subject property. There are eight steps involved in the process of valuation, which are shown in Figure 1 below as 1. Definition of the Problem, 2. Scope of Work, 3. Data Collection and Property Description, 4. Data Analysis, 5. Land Value Opinion, 6. Application of the Approaches to Value, 7. Reconciliation and Final Opinion of Value, and 8. The Report of Defined Values. (McKinley, M., 2001).
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