Real Estate APPRAISALS

Appraisal education in the United States may be often provided by professional organizations. At present time it is not necessary to have a college degree in order to become an appraiser.

A real estate appraisal 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 for a specific point in time.

For mortgage valuations of improved residential property, this value is often reported on a standardized form, the Uniform Residential Appraisal Report, Fannie Mae Form 1004. Download Uniform Residential Appraisal Report here. Do NOT forget to read the FAQ related to this Uniform Residential Appraisal Report. This type of appraisal is the most complete and more costly. Less complete appraisal forms are available from the Fannie Mae site and these have their own utility.

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.

Some additional terms that related to value and may be of interest are:

• Broker Price Opinion (BPO): Estimate done by a real estate agent.
• Value of home determined by the County Auditor for tax purposes.
  

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. The paying party may also be entitled to a copy of the appraisal report, so make a written request for ALL pages and contents of the appraisal report.

Some Exhibits

• A street map that shows the location of the subject property and of all comparables that the appraiser used;
  
  
• An exterior building sketch of the improvements that indicates the dimensions. The appraiser must also include calculations to show how he or she arrived at the estimate for gross living area. A floor plan sketch that indicates the dimensions is required instead of the exterior building or unit sketch if the floor plan is atypical or functionally obsolete, thus limiting the market appeal for the property in comparison to competitive properties in the neighborhood;
  
  
• Clear, descriptive photographs (either in black and white or color) that show the front, back, and a street scene of the subject property, and that are appropriately identified. (Photographs must be originals that are produced either by photography or electronic imaging.);
  
  
• Clear, descriptive photographs (either in black and white or color) that show the front of each comparable sale and that are appropriately identified. Generally, photographs should be originals that are produced by photography or electronic imaging; however, copies of photographs from a multiple listing service or from the appraiser's files are acceptable if they are clear and descriptive;
  
  
• Any other data--as an attachment or addendum to the appraisal report form--that are necessary to provide an adequately supported opinion of market value.