Real Estate Appraisal is simply the process of valuing real property. The value usually sought is the property's market value. But how are appraisals needed and how are they utilized?
Why are Appraisals Needed?: Appraisals are needed because compared to, say, corporate stock, real estate transactions occur very infrequently. Not only that, but every property is different from the next, a factor that doesn't affect assets like corporate stock. Furthermore, all properties differ from each other in their location - which is an important factor in their value. This product differentiation and lack of frequent trading, unlike stocks, means that specialist qualified appraisers are needed to advise on the value of a property. Thus, the appraiser usually provides a written report on this value to his or her client.
How are Appraisals Utilized? Appraisal reports have many uses. They can be used as the basis for mortgage loans, for settling estates and divorces, for tax matters, for determining appropriate levels of insurance, and to determine the prce at which a property should be bought / sold. Appraisals are commissioned by property owners, investors, insurance companies and other participants in the real estate industry.
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