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Real Estate Appraisal - Tips

Thu, 8 Jul 2010 00:41:48

Real Estate Appraisal
Quote: A real estate appraisal is a service performed by a licensed or certified appraiser, who develops an opinion of value based upon the highest and best use of real property. The highest and best use is that use which produces the highest value for the land, as if vacant. This use is based on 4 parts; physically possible, appropriate, legal, and economically feasible. Also of importance is the definition of the type of value being developed and this must be included in the appraisal, i.e. market value, condemnation value, quick sale value, etc. For mortgage valuations of improved residential property, this value is most often reported on a standardized form, the Uniform Residential Appraisal Report.[citation needed] An appraisal is performed for a specific client, to whom the appraiser has a fiduciary responsibility, regardless of what party ultimately pays for the appraisal, whether anyone actually pays for the appraisal, or when the appraisal is paid for. Typically residential appraisers agree to accept orders from lending institutions with the understanding that payment will be made following settlement, or closing of the loan. In most cases, the homeowner or buyer ultimately pays for a residential appraisal, either directly or rolled into settlement fees. In the USA, minimum appraisal standards and appraiser qualifications are the province of The Appraisal Foundation which is chartered by Congress.[citation needed] Through one of its boards, The Appraisal Standards Board (ASB), it periodically publishes the Uniform Standard of Professional Appraisal Practice (USPAP). USPAP provides the minimum development and reporting standards an appraiser/appraisal report must meet. The Appraisal Foundation is also responsible for setting the minimum qualifications for appraiser licensure/certification through its other board, The Appraisal Qualifications Board (AQB). The AQB is responsible for establishing the minimum education, examination, and experience requirements for licensed/certified appraisers. Effective January 1, 2008, the requirements to become a state licensed or certified real property appraiser will significantly increase.[1] State licensing was established in the early 1990s in the wake of the Savings and Loan "crisis". The implementation of licensure and enforcement are state functions. In addition, there are appraisal organizations, private not-for-profits, some of which date back to the Great Depression of the 1930s, such as the American Society of Farm Managers and Rural Appraisers, founded in 1929.[citation needed] Others were founded as needed and opportunity arose in specialized fields, such as the Appraisal Institute and the American Society of Appraisers (founded in the 1930s) and the International Right of Way Association and the National Association of Realtors (after World War II). These organizations all existed to establish and enforce standards, but their influence has waned as the government increases appraisal regulation. There are several professional organizations of appraisers in the US. They include the American Society of Appraisers (ASA), the American Society of Farm Managers and Rural Appraisers, and the largest, the Appraisal Institute (AI). In addition to state licensing and certification, appraisers can earn professional designations from the above organizations. The most highly regarded is the MAI (Member, Appraisal Institute) which requires approximately one year of post graduate college level course work, a three year internship, and successful completion of a two day Comprehensive Examination. In the UK, real estate appraisal is known as property valuation and a real estate appraiser is a land valuer or property valuer (usually a chartered surveyor who specialises in property valuation). Property valuation in the UK is regulated by the Royal Institution of Chartered Surveyors (RICS), a professional body encompassing all of the building and property-related professions. The RICS professional guidelines for valuers are published in the RICS Appraisal and Valuation Standards, commonly known as the Red Book. The reader should be aware that differences in nomenclature exist between the different countries. Although the overall concepts are very similar, the reader should be careful to ascertain that the proper nomenclature is being used for their particular area.
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Real Estate Appraisal

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