An appraiser is a licensed professional who provides an opinion of value for real property based on analysis of market data and property characteristics.

• Determines market value, not price
• Must be impartial and independent
• Uses recognized valuation methods
• Prepares a written appraisal report
• Often required by lenders for financing

• Sales Comparison Approach
  • Compares the subject property to recently sold comparable properties
  • Most common for residential property

• Cost Approach
  • Estimates value by calculating the cost to replace or reproduce improvements
  • Depreciation is subtracted
  • Often used for new or special-purpose properties

• Income Approach
  • Based on the property’s ability to generate income
  • Uses capitalization rates and net operating income
  • Common for income-producing properties

• Protects the lender and public
• Helps ensure the property is not overvalued
• Appraisal may affect loan approval and amount

• Appraiser
  • Gives an opinion of value
  • Must be neutral

• Broker
  • May give a price opinion (CMA/BPO)
  • Represents a client

• An appraisal is an opinion, not a guarantee of value
• Appraisers do not set the sales price