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BASIC SUMMARIZED INFORMATION FOR UNDERSTANDING PROFESSIONAL REAL ESTATE APPRAISALS

Who is the client?

The person or entity that engages the services of the appraiser.

What are the appraisal fees?

What is customary and typical for professional appraisal services in the marketplace, considering the property, the market, the scope of work needed to solve the appraisal problem, the complexity of the assignment and the approaches and methods to be developed, and additionally the user(s) and use(s) of the appraisal report.

What about appraisal report types?

  1. Form Reports (summary reports)
  2. Appraisal Reports (narrative reports)
  3.  Restricted Appraisal Reports

Amongst the various types or real estate subject to an appraisal, the following are typically considered:

  1. Vacant land
  2. Residential
  3.  Commercial
  4. Industrial
  5. Institutional
  6. Special Purpose
  7. Conservation (may require an appraisal under the Uniform Appraisal Standards for Federal Land Acquisitions, known as UASFLA if federal funds are used in the acquisition for conservation)
  8. Easements
  9. Usufructs

Note: There are subtypes for all the property types listed.

The interests to be appraised can be defined as:

  1. Fee Simple or Freehold Interest
  2. Leased Fee Interest
  3. Leasehold interest
  4. Fractional interest
  5. There are other interest that may be the subject of appraisal. The appraiser must find out which is the interest to be valued, to apply the adequate appraisal methodology accordingly.

Real Estate Interests include:

  1. The use of a real estate appraisal report may include:
  2. The right to buy or sell the interest
  3. The right to lease or occupy the interest
  4. The right to mortgage or finance the interest
  5. The right to exchange the interest (barter)
  6. The right to give the interest away (donation)

The uses of a real estate appraisal includes:

  1. Transfer of ownership (buy /sell)
  2. Property taxation
  3. Expropriation
  4. Financing & credit
  5. Leasing (may include “lease vs buy” analysis)
  6. Bartering
  7. Donation
  8. Estate distribution
  9. Matrimonial assets liquidation
  10. Litigation
  11. Investment counseling
  12. Internal decision making
  13. Asset allocation

By Diego Sorroche Fraticelli

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