Quick answers to Utah appraisal questions
What is an appraisal?
An appraisal is a process leading to an opinion of value. The opinion is estimated through a process with three common forms of approaches to value. They are typically the cost approach, the sales comparison approach and the income approach.
What does an appraiser do?
A real estate appraiser inspects property and rates its value in comparison to similar properties around the area. Appraisers are usually employed by banks and realtors, although they are available for individuals who wish to obtain an idea of the value of their property. The fees for these services fluctuate depending upon the complexity of the assignment.
For residential properties, a real estate appraiser uses current and past real estate information to estimate the value of the home. An appraisal is not an exact science, however; in general an appraiser will use several other homes or properties in a specified area to which to compare your home. The appraiser uses information from several homes that have sold, several homes that were available for sale but did not sell in a specified amount of time, and several homes that are currently listed on the market for sale. This will show the appraiser the upper end of the market. The appraiser will use this information to calculate your home’s current market value.For a commercial real estate property appraisal, the appraiser will use the same type of analysis. The appraiser will include a market sales comparison approach and typically an income approach for the property, which is derived from the marketplace from rents and capitalization rates. The same is true with any type of commercial property, whether it be retail, industrial, office or specialized use properties. Generally the cost approach is reserved for property which is difficult to appraise within the marketplace, and the reproduction cost would be applied to establish a value for that type of property.
How are appraisers certified?
Regulations regarding licenses of real estate appraisers vary from state to state. In Utah, licensing and certification comes with many hours of course work, tests, practical experience and eventually on-hand training with another appraiser for a number of years.
What is the definition of Market Value?
The highest price a willing buyer would pay and a willing seller would accept, both being fully informed, and the property being exposed for sale for a reasonable period of time. The market value may be different from the price a property can actually be sold for at a given time (market price). The market value of an article or piece of property is the price that it might be expected to bring if offered for sale in a fair market; not the price that might be obtained on a sale at public auction or a sale forced by the necessities of the owner, but such a price as would be fixed by negotiation and mutual agreement, after ample time to find a purchaser, as between a vendor who is willing (but not compelled) to sell and a purchaser who desires to buy but is not compelled to take the particular article or piece of property.
Why would a person need a home appraisal?
There are many reasons why a person would need an appraisal on their property. Typically the biggest reasons are for loan purposes, to lower tax burden, for state purposes, for the determination of a reasonable selling price when selling real estate, for the Internal Revenue Service and for anything that would involve a lawsuit.
What is contained within the appraisal report?
Each report must contain an estimated value of the property. The appraisal must identify the scope of the work, the intended user of the report, the purpose of the assignment, the type of value and the effective date of the appraiser’s opinions and conclusions.
Where does an appraiser get the information to estimate value?
Gathering data is the prime role of an appraiser. Typically, because Utah is a non-disclosure state, most of the information is obtained from local multiple listing services, title companies and the buyers and sellers of properties.
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