Appraisals

What is an Appraisal?
An appraisal is a professional appraiser’s opinion of value. 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. Appraisals may be required for any type of property, including single-family homes, apartment buildings and condominiums, office buildings, shopping centers, industrial sites, vacant land and farms. The reasons for performing a real property appraisal are just as varied. They are usually required whenever real property is sold, mortgaged, taxed, insured, or developed. For example, appraisals are prepared for:

  • Mortgage lending purposes
  • Tax assessments and appeals of assessments
  • Negotiation between buyers and sellers
  • Government acquisition of private property for public use
  • Business mergers or dissolutions
  • Division of marital assets
  • Estate planning/Estate tax
  • Lease negotiations

What is the Role of the Appraiser?
The role of the appraiser is to provide objective, impartial, and unbiased opinions about the value of real property—providing assistance to those who own, manage, sell, invest in, and/or lend money on the security of real estate. Appraisers assemble a series of facts, statistics, and other information regarding specific properties, analyze this data, and develop opinions of value. Each appraisal assignment challenges the appraiser’s ability to put analytical skills into practice, exercise sound judgment, and communicate effectively.


What Qualifications Must an Appraiser Have?
All states require appraisers to be state licensed or certified in order to provide appraisals to federally regulated lenders. Some states require appraisers to be licensed or certified to provide appraisals for other parties as well. To become licensed or certified, you must pass an examination that is administered by your state’s appraisal board. Because state requirements vary, contact your state’s regulatory agency for specific requirements. The Appraiser Qualifications Board (AQB) of The Appraisal Foundation is authorized by Congress to establish the minimum requirements for Certified General Real Property Appraiser and Certified Residential Real Property Appraiser classifications, and the AQB provides recommended minimum requirements for the Licensed Real Property Appraiser and Trainee classifications. Descriptions for the four categories can be found on The Appraisal Foundation Web site.


Are There Different Categories of Real Estate (Real Property) Appraisers?
The Appraiser Qualifications Board (AQB) of The Appraisal Foundation is authorized by Congress to establish the minimum requirements for Certified General Real Property Appraiser and Certified Residential Real Property Appraiser classifications, and the AQB provides recommended minimum requirements for the Licensed Real Property Appraiser and Trainee classifications. Descriptions for the four categories can be found below (more information can be found on The Appraisal Foundation Web site):

  • Appraiser Trainee: Someone who is qualified to appraise those properties, which the supervising certified appraiser is qualified to appraise.
  • Licensed Real Property Appraiser: Someone who is qualified to appraise non-complex one to four units having a transaction value less than $1,000,000 and complex one to four residential units having a transaction value less than $250,000. This classification does not include the appraisal of subdivisions.
  • Certified Residential Real Property Appraiser: Someone who is qualified to appraise one to four residential units without regard to value or complexity. This classification does not include the appraisal of subdivisions. To be a state certified residential appraiser qualified to do appraisals for federally related transactions, a state must have requirements that meet or exceed this minimum standard.
  • Certified General Real Property Appraiser: Someone who is qualified to appraise all types of real property. To be a state certified general appraiser qualified to do appraisals for federally related transactions, a state must have requirements that meet or exceed this minimum standard.

The BPO, or Broker Price Opinion, is a tool used by lenders and mortgage companies to value properties in situations where they believe the expense and delay of an appraisal is not necessary. Real estate brokers are given an order to do a BPO by the lender, mortgage company or loss mitigation company. The broker does either a Drive By BPO or an Internal BPO in most cases.

  • Broker Price Opinion, is a method that a real estate broker (or a sales agent acting on behalf of their employing broker) uses to estimate the probable selling price of a real estate property/house.

The following are some reasons that a seller should consider either an appraisal, or a market analysis performed by a real estate professional.

  • Homes that are listed for sale by the owner, without the assistance of a real estate agent, are known as FSBOs (pronounced FIZZ-BO).
  • A professional real estate agent/appraiser can help you set a realistic selling price so your home will attract buyers and gives you something concrete to show your potential buyers.
  • The appraised value can sometimes be much more than the homeowner had estimated which could have cost them thousands of dollars.
  • An overpriced home will not attract buyers and can waste valuable time and money. An appraisal can help determine a fair market value.
  • The appraiser can point out any needed repairs or deferred maintenance which may cause market resistance or lower the value. These items can be improved before placing the house on the market.
  • Potential buyers know you have an emotional attachment to your home. A professional appraiser’s value will provide credibility to your asking price.
Call Us Today to Buy, Sell, or Appraise a Property! 316.321.6100