Property appraisals are designed to provide confidential and specific value estimates of given lots. These services are expected when selling, purchasing, or mortgaging a real estate property through the FHA or bank. Additionally, homes purchased with a VA loan must be evaluated by an appraiser first. As a neutral third party that isn’t influenced by the property’s value whether the value is high or low, a property appraiser has providing a fair market value by collecting data on the property’s condition, location, and more, as the end goal. You may use this service for a range of reasons, whether you’re dividing assets after a divorce, finding your new home, or looking to make a profit.

The three primary types of real estate appraisals include what are referred to as the cost approach, the income capitalization approach, and the sales comparison approach. The cost approach includes an appraisal subtracting value for any foreseen issues relating to improvements that need to be made, which makes this type of real estate appraisal efficient for newer structures.

The income capitalization approach is useful for commercial properties and relates to income possibilities and past data, which makes for a more technical appraisal. Lastly, the sales comparison appraisal is a combination approach that factors in the surrounding area and similar properties into the value estimate.

A real estate appraiser is paid for by either the homeowner, business owner, property buyer, or property lender. The average cost of a home appraisal of a single-family residence typically goes for around $300-$400, while a multi-family building appraisal may cost around $600. Commercial appraisals rarely cost less than $2,000, and $4,000 is typically the most common price point. The price of a land appraisal may cost between $2,000 and $3,000. That said, property appraisals vary depending on location and what type of property you have. You may want to first ask real estate appraisers for a quote on how much a given estimate will run for.

A real estate appraiser is a certified professional who has undergone in-depth training to correctly and accurately provide value estimates on commercial, residential, and land properties. An appraiser collects information on recent new construction costs, sales prices of similar real estate properties, expected improvements or foreseen depreciations, rental prices and trends of similar properties, and more. After the review process, an unprejudiced report is compiled that leads to a property’s market value estimate. While all appraisers are still humans, their opinion on a given property’s value is supported by substantial evidence that can be tracked through their report on the valuation.

The appraised value of a property is the unbiased and sound judgement of how much a property is worth, made by professional property appraisers. Because this is an unbiased way to find a property’s fair market value, the appraised value of a property is needed during the mortgage loan process and to ensure that properties are listed on the real estate market at regulated prices. The appraised value of a property is based off of the property’s current condition, location of the property, and how the surrounding area impacts the property’s worth. Additionally, comparable property value estimates influence your appraised property’s end number.