COMMONLY ASKED QUESTIONS ABOUT
REAL ESTATE APPRAISALS AND APPRAISERS
What is an appraisal?
An appraisal is the act or process of estimating value. It
involves research into
appropriate market areas; the assembly and analysis of
information pertinent to a
property; and the knowledge, experience and professional
judgment of the appraiser.
What is the role of the appraiser?
The role of the appraiser is to provide an accurate and
impartial, third-party estimate of
real estate value – providing assistance to those who own,
manage, sell, invest in and/or
lend money on the security of real estate.
What qualifications must appraisers have?
At minimum, all states require appraisers to be state
licensed or certified. However, the
Appraisal Institute enables appraisers to go beyond these
minimum requirements to
currently earn a professional MAI general designation, or
SRA residential designation.
Appraisal Institute-designated members have fulfilled
rigorous educational and
experience requirements and must adhere to strict standards
and a professional code of
How do well-credentialled appraisers add value to real estate transactions?
They bring knowledge, experience, impartiality and trust to
the transaction. In so doing,
they help protect real estate buyers from overpaying for
property and lenders from over-lending
What are the components of an appraisal?
An appraisal generally consists of: a legal description of
the property; description of the
interior and exterior of the property; square footage measurements;
listing of comparable
properties “as near the subject property as possible;”
description of the neighborhood;
and information regarding current real estate activity
and/or market trends in the
What are the most important considerations in the
valuation of real estate
The value indicated by recent sales of comparable
properties, the current cost of
reproducing or replacing a building, and the value that the
property’s net earning power
will support are the most important considerations in the
valuation of real estate property.
What is the range of services appraisers provide?
In addition to residential and/or commercial appraisals –
and depending upon an
appraiser’s designation and qualifications – he or she can
provide/assist with some or all
of the following:
planning and estate settlements
assessment review and advice
in eminent domain and condemnation property transactions
resolution – including divorce, estate settlements, property partition
and zoning issues
rent and trend studies
or investment analysis, e.g. financial return on remodeling
and demand studies
When hiring an appraiser, what types of questions should I ask?
The following questions would be appropriate:
professional designations do you have and from whom?
you licensed or certified in the state in which you live?
long have you been in practice?
level of experience do you have in this particular market and with this
type of property?
you familiar with property in this neighborhood?
types of clients have you had (homeowners, estates, lenders, relocation
When in need of an appraiser, why should I hire a member
of the Appraisal
Appraisal Institute members earn professional designations
that mandate stringent
educational requirements, considerable professional
experience, and adherence to
standards of professional practice that exceed those
required by state or federal law.
Moreover, members’ required participation in continuing
education programs - including
those that emphasize the most-up-to-date valuation
techniques - make Appraisal
Institute-designated members the preferred source for
high-quality appraisal services.