Jan 2024 Basic Appraisal Procedures Questions and Answers

8 Steps in the Valuation Process - 1) Define the problem 2) Determine scope of work 3) Gather, record and verify the data 4) Determine the highest and best use 5) Estimate the land value 6) Estimate value by each of the 3 approaches (if applicable) 7) Reconcile the estimated values into the final opinion of value 8) Report the final opinion of value Defining the Problem: 6 Sub-steps within - -Identification and location of the real estate -Identification of the property rights -Definition of value -Purpose and intended use of the appraisal -Effective date of the opinion of value -Any special limiting conditions Real Property - *the interests, benefits and rights inherent in the ownership of real estate -partial estates: life estate, easement & encroachment -specialized form of ownership: condo, coop, PUD, & timeshare Effective Date of the Value Opinion - -two dates are essential to an appraisal report -the effective date of value can be a past (retrospective), current or future (prospective) date, in many cases it's the date the appraiser inspects the property; the decision will be made in concert with the client's needs -the date of the report is the date you sign and issue the final report Any Special Limiting Conditions - -two common types are: extraordinary assumption & hypothetical condition