A Real Estate Appraisal is a comprehensive report that identifies and documents the true value of a property. This report includes detailed information about the subject property and side-by-side comparisons of other similar properties. It also includes the real estate market in the area, as well as statements or notes indicating problems or defects that might affect the property’s value. An appraisal also considers the land value, and any other assets that may be included with the property.
An appraiser can determine a fair price based on their expertise and research into past property transactions. An appraisal will reveal the current value of a property in the area, as well as the potential for appreciation. Once a property is listed for sale, it must be priced competitively, but it must be marketed properly to achieve the desired return. To avoid losing a potential buyer, the seller should provide all documents related to the property.
Most appraisals are based on fair market value, which assumes that the seller and buyer are knowledgeable and are acting in their own best interests. However, real estate investors need to understand other types of property valuation. They may need to know about value-in-use, which describes the financial benefit of the property, and liquidation value, which represents the estimated price of the property at auction. Whether the buyer decides to sell the property or keep it, they should be present at the appraisal.