Purpose Of The Appraisal

Definition of "Purpose of the appraisal"

Lyndi Nickerson real estate agent

Written by

Lyndi Nickersonelite badge icon

Weichert Realtors

The reason a property appraisal is being made. The purpose of the appraisal is the first step in the appraisal process. The purpose of the appraisal should answer several questions:

  1. What specific problem will the appraisal resolve? If the purpose of the appraisal is to determine property value for the purpose of acquiring a bank loan or mortgage, then the appraisal will focus on long term property value trends in the region.
  2. If the appraisal is being used for the value insurance of the property, then replacement cost is a primary consideration.
  3. Will appraisal assist in determining the price to be paid for certain piece of property? If this is the case, then the appraisal should on comparable sales as carefully appraising specific features and improvements made to the property in question.
  4. If the major purpose of the appraisal is for the purpose of tax assessment, then comparable values of similar properties is the main interest of the appraisal.
  5. Is the appraisal to be used in a public condemnation process or a sale resulting from a divorce? If this is the purpose, then the appraisal should focus on recent sales of similar properties not involved in a forced sale.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Real Estate Terms

A mortgage where the payments are overdue and open to a foreclosure action at any time. A mortgage not having a prepayment clause permitting the mortgagor to repay the mortgage at any ...

Clause inserted into a commercial lease by a mortgagee stating the lessee's current lease will not be terminated if there is a foreclosure action against the landlord for the failure to ...

All expenses related to maintaining and operating a household. These expenses include the cost of rent or mortgage payments, taxes, utilities, maintenance and structural improvements. The ...

British thermal unit-a unit of energy associated with the creation of heat. Prior to 1929, it was defined as the amount of heat required to raised the temperature of 1 pound of water 1 ...

Interest based on a 360-day year instead of a 365-day year. The former is referred to as simple interest and the latter is termed exact interest. The difference between the two types of ...

Regional area from which a particular product or service can expect its greatest demand. For example, a retail department store expects to attract shoppers from a market area having a ...

Payment of the minimum tax by using legal tax planning opportunities such as estate planning. The use of tax avoidance strategies is a sound approach to retaining cash flow. On the other ...

Paneled brickwork between timber quarters, a framed wall, or partition. ...

Judicial appointed person who takes possession, but not the title, to real estate during a bankruptcy process referred to as a receivership or a foreclosure proceeding. The receiver is ...

Popular Real Estate Questions