FREQUENTLY ASKED QUESTIONS

An appraisal is a process by which a given property is assessed and given a value.

An appraiser’s job is to provide a professional estimate of a given property’s value. This estimate is communicated to other appraisers and interested parties (property owners, real estate agents, lenders, etc.) via a report that explains what data the appraiser used to arrive at the valuation and how that data was analyzed.

The report must include the following items:

• The client and other intended users
• The intended use of the report
• The purpose of the assignment
• The type of value reported, and the definition of the value reported
• The effective date of the appraiser's opinions and conclusions
• Relevant property characteristics, physical attributes of the property interest valued, including location attributes, and non-real estate items included in the appraisal, such as intangible items
• All known easements, encumbrances, restrictions, ordinances, reservations, leases, covenants and restrictions, and other items of a similar nature
• Division of interest, such as fractional interest, physical segment and partial holdings
• The scope of work used to complete the assignment

A credible estimate of value must be reflected in the report.

When delivering or communicating the appraisal report, the appraiser must ensure the following:

1. That all information analysis utilized to create the appraisal was appropriate
2. That no significant errors (of omission or commission) were committed
3. That the appraisal services were not rendered carelessly or negligently
4. That the appraisal report communicated was credible and supportable

Lenders typically hire appraisers for their expertise in valuing real estate and assisting with litigation, investment decisions, and tax matters. Property owners may also hire appraisers as they attempt to market and price their properties.