Other Definitions
appraisal (dict)
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AppraisalThe act of appraising the value of an item or real property, usually performed as a service by someone recognized as an expert or certified by an organization as such, and usually on property of high value that may need to be bought, sold or insured. Common appraisal fields are; In the field of real estate transactions, appraisal refers to the act of determining 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.
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