Appraisals Explained
An
appraisal of real estate is the valuation of the rights of ownership. The
appraiser must define the rights he intends to appraise.
The appraiser does not create value, the appraiser
interprets the market to arrive at a value estimate. As the appraiser compiles
data pertinent to a report, consideration must be given to the site and
amenities as well as the physical condition of the property. An appraiser may
spend only a short time inspecting the property, however, this is only the
beginning. Considerable research and collection of general and specific data
must be accomplished before the appraiser can arrive at a final opinion of
value. Due to the many types of value, such as Fair Market Value, Insurance
Value, Tax Value and Value In Use, the need to
precisely define the purpose of the appraisal is essential. Pinehurst
golf homes for sale.
An
appraisal is an opinion of value or the act or process of estimating value.
This opinion or estimate is derived by using three common approaches, all
derived from the market. They are:
1.
Cost Approach to value
is what it would cost to replace or reproduce the improvements as of the date
of the appraisal, less the Physical Deterioration, the Functional Obsolescence
and the Economic Obsolescence. The remainder is added to the Land Value.
2.
Comparison Approach to
value makes use of other "bench mark" properties of similar size,
quality and location that have been recently sold. A comparison is made to the
subject property.
3.
Income Approach to value
is of primary importance in ascertaining the value of income producing
properties and has little weight in residential type properties. This approach
provides an objective estimate of what a prudent investor would pay based upon
the net income the property produces. Then, after thorough analysis of all
general and specific data gathered from the market, a final estimate or opinion
of value is correlated. Homes for sale on the Pinehurst golf
courses.
Coldwell Banker United Realty
Dale
Heck – Realtor/Broker
910-528-4652
Cathy Bason – Realtor/Broker
910-528-5244