A Real Property Appraisal (aka Real Estate Appraisal, Property Valuation or Land Valuation) is a professional, independent, unbiased opinion of value of the fair market value for a property based on it's Highest and Best Use. Several factors come in to play when a property is being appraised such as, location, age, condition and improvements of the home & property. The Appraiser comes to the property to conduct an inspection, taking pictures, notes and asking various questions regarding the property and improvements. Upon completion of the inspection, the appraiser will then compile additional information from external resources available to them. Analyzing the information gathered from the inspection and additional resources, the appraiser will then utilize a combination of the methodologies taught, to determine the fair market value of the property.
These methods are:
1. Cost Approach - typically most reliable when appraising unique properties.
2. Sales Comparison Approach- most commonly used approach to value.
3. Income Approach- generally used in a Rental Property appraisal.