Appraisal
From Wikipedia, the free encyclopedia
- This article is about economic appraisal. For the decision model, see Appraisal (decision analysis).
Appraisal is the act of estimating the monetary value of real, personal, or intangible property, usually performed as a service by someone recognized as an expert or certified by an organization or government agency.
Common appraisal fields are;
- Business Valuation
- Machinery and Technical Specialties
- Personal Property/Gems and Jewelry
- Real Property- the most common usage of the term appraisal
- Domain Name Appraisal & Valuation
In the field of real estate transactions, appraisal is the act of presenting an opinion of 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 - also known as "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,
- appraisal in shareholder litigation
Retail space may be valued based on the rental income.
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Appraisal according to the Cambridge Advanced Learner's Dictionary means:
1 when you examine someone or something in order to judge their qualities, success or needs: The newspaper gave an editorial appraisal of the government's achievements of the past year.
2 (job/performance) appraisal when an employee meets with their manager or employer to discuss their progress, aims and needs at work: Many companies operate regular job appraisals, often on an annual basis.
