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Appraisal is the act of estimating the monetary value of real, personal, or intangible property, usually performed as a service by someone recognized as an expert or certified by an organization or government agency.

Common appraisal fields are;

  • Aircraft
  • Antiques
  • Construction equipment
  • Jewellery
  • Real estate appraisal - the most common usage of the term appraisal

In the field of real estate transactions, appraisal is the act of presenting an opinion of the value of a property. There are two main types of appraisal:

  • Fee Appraisal - Appraisal of an individual property by a contracted appraiser who is usually paid a fee. For example, this will be done prior to a loan being issued by a bank, to verify that there is sufficient collateral should the borrower default.
  • Mass appraisal - Appraisal of many properties using a more statistical approach. Usually done by government agencies responsible for setting values for property tax calculations.

There are various approaches to determining the value, including:

  • Market - a.k.a. "sales comparison" - establishing the value based on a comparison of what similar properties have sold for.
  • Cost - Establishing value based on the cost to build that structure new, less depreciation.
  • Income - For commercial properties, establishing the value based on the income the property generates. For example, Retail space may be valued based on the rental income.
 This Real estate related article is a stub. You can help Wikipedia by expanding it.

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This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "appraisal".