Real Estate Home Appraisal O.C.

Bernie Ryerson
Michelle Yegsigian

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AN APPRAISAL

Real estate appraisal, property valuation or land valuation is the practice of developing an Opinion of the Value of Real Property, usually its Market Value. The need for appraisals arises from the nature of property: no two properties are identical, and all properties differ from each other in their location - which is one of the most important determinants of their value. The absence of a market-based pricing mechanism determines the need for an expert appraisal/valuation of real estate/property.

In order for a homeowner or a buyer of property to get a proper mortgage loan, a complete appraisal must be performed.

There are several types and definitions of value sought by a real estate appraisal. These would apply to any type of property - Single Family Homes, Condos, Townhouses, Income-Producing Properties, Duplexes, Apartments. Some of the most common are:

Market Value – The price at which an asset would trade in a competitive setting. Market Value is usually interchangeable with Open Market Value or Fair Value. Market Value is the estimated amount for which a property should exchange on the date of valuation between an educated buyer and a reasonably motivated seller in an arms-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without undue influence.
Value-in-use – The net present value of a cash flow that an asset generates for a specific owner under a specific use. Value-in-use is the value to one particular user, and may be above or below the market value of a property.
Investment value - is the value to one particular investor, and is usually higher than the market value of a property.
Insurable value - is the value of real property covered by an insurance policy. Generally it does not include the site value.
Liquidation value -- may be analyzed as either a forced liquidation or an orderly liquidation and is a commonly sought standard of value in bankruptcy proceedings. It assumes a seller who is compelled to sell after an exposure period which is less than the market-normal timeframe.