FAQ - Frequently Asked Questions
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.
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.
What qualifications must
At minimum, all states require appraisers
to be state licensed or certified in order to provide appraisals
to federally regulated lenders. However, appraisers who become
designated members of the Appraisal Institute have gone beyond
these minimum requirements. They have fulfilled rigorous
educational and experience requirements and must adhere to
strict standards and a code of professional ethics. The Appraisal
Institute currently confers the MAI membership designation
on those who are experienced in the valuation of commercial,
industrial, residential and other types of properties. The
SRA membership designation is held by those who are experienced
in the analysis and valuation of residential real property.
How do well-credentialed appraisers add value
to real estate transactions?
They bring knowledge, experience,
impartiality and trust to the transaction. In so doing, they
help their clients make sound decisions with regard to real
What are the components of an appraisal report?
Most appraisals are reported in writing, although in certain
circumstances, an appraiser may provide an oral appraisal.
A written appraisal report generally consists of: a description
of the property and its locale; an analysis of the “highest
and best use” of the property; an analysis of sales
of comparable properties “as near the subject property
as possible”; and information regarding current real
estate activity and/or market area trends.
What are the most
important considerations in the valuation of real property?
The value indicated by recent sales of comparable properties,
the current cost of reproducing or replacing a building,
and the value that the property’s net earning power
will support are the most important considerations in the
valuation of real property.
What is the range of services
In addition to residential or commercial
appraisals—and depending upon an appraiser’s
designation and qualifications— he or she may be able
to assist with the following:
- Estate planning and
- Tax assessment review and advice
in eminent domain and condemnation property transactions
resolution—including divorce, estate settlements,
property partition suits, foreclosures, and zoning issues
- Expert witness testimony
rent and trend studies
- Cost/benefit or investment
analysis, for example, what will be the financial return
- Land utilization studies
and demand studies
When hiring an appraiser, what types of
questions should I ask?
The following questions would be
- Are you licensed or certified in the
state in which you live?
- What professional designations
do you have and from what groups?
- How long have you
been in practice?
- What level of experience do you
have in this particular market and with this type of property?
you familiar with property in this neighborhood?
types of clients have you had (homeowners, estates, lenders,
When in need of an appraiser, why
should I hire a member of the Appraisal Institute?
who hold Appraisal Institute professional designations have
met stringent educational requirements, have considerable
professional experience and are required to adhere to strict
standards and ethics of professional practice that exceed
those required by state or federal law. Moreover, many Appraisal
Institute designated members participate in continuing education
programs— including those that emphasize the most-up-to-date
valuation techniques—making them the preferred source
for high-quality appraisal services.
FAQ courtesy of the Appraisal