A Certified Appraisal is an indispensable tool when an unbiased and accurate estimation of value is required. Until a property changes hands in a transaction, its value is essentially an informed opinion. Even the final sale price represents a range of plausible values—anyone with experience in business negotiations or haggling can affirm this. The value and marketability of real estate aren't fixed. A Certified Appraisal offers confidentiality, objectivity, and adherence to a rigorous set of rules—many backed by law.
1. The Site Visit: A Tiny Piece of a Big Puzzle
An appraisal can take anywhere from eight to sixty hours. During an appraisal, an appraiser might spend less than twenty minutes inspecting a small property. However, at SFREAppraisal, we often invest four hours or more before the site visit, researching public property records, zoning laws, demographic data, and comparable properties. This research continues after the site visit as we delve deeper into your property's specifics, compare it to similar properties, and initiate a comprehensive analysis. The valuation phase alone can take six to sixty hours, during which we use our initial research and market knowledge to evaluate your property. All these findings are then condensed into a report.
2. Appraisers Follow a Strict Code of Ethics by Law
If an appraiser refuses to fulfill a request, it's likely due to legal or ethical constraints. Appraisers are bound by the Uniform Standards of Professional Appraisal Practice (USPAP)—a comprehensive set of guidelines aimed at providing credible, unbiased opinions and maintaining public trust. There are also federal standards to comply with, and MAI-designated appraisers are further accountable to the Appraisal Institute.
3. Only Two Types of Appraisal Reports Exist by Law
Restricted Appraisal Report – A cost-effective yet highly summarized report intended for a single knowledgeable client. Not for third party reliance.
Appraisal Report – A detailed report that can serve a broader audience.
Our legal obligation compels us to produce an unbiased, credible report, always documented in writing.
4. The Same Value is Concluded in Both Reports
Both "Restricted Appraisal Report" and "Appraisal Report" will arrive at the same conclusions, but they vary in the level of detail provided. Regardless of the report type, we undertake the necessary steps to derive a credible conclusion.
5. Most Qualified Appraisers Are Often the Actual Value Estimators
At SFREAppraisal, you won't find junior appraisers. The company's owner handles each appraisal. This practice is rooted in our belief that an appraisal report's credibility is often tied to the least-competent signer. Therefore, check for secondary signatures on your appraisal report, as they are frequently the researcher, writer, and analyst estimating your property's value.
6. Our "Client" Is Whoever Orders the Appraisal
If you order an appraisal, no one else can access the information without your permission. However, if a lender orders the appraisal, you may not be entitled to the final report without their consent. Appraisers are legally obligated to maintain confidentiality.
7. Be Clear About the Intended Users
Ensure the appraiser is aware of who should be allowed to rely on the report. Whether it's the IRS for estate planning, a county Appraiser for a tax appeal, or others, make sure they are identified in the appraisal.
8. Honesty is the Best Policy
Don't attempt to hide imperfections or exaggerate amenities. Appraisers are trained to verify all the data they include in the appraisal. If challenged, they must be prepared to defend their conclusions. Any inconsistencies are usually noticeable, as the appraiser's observations and assumptions are documented in the report.
9. How Much Should a Certified Appraisal Cost?
Quality appraisers need to justify anywhere between $1,200 and $2,500 per day to stay in business, depending on various factors like overheads, efficiency, workload, and the client's service-level needs. An apprisal can take anywhere from a day to a month, but under most conditions appraisers will guarantee a "fixed fee" to eliminate exposure to cost-creep. However, cost alone cannot guarantee the accuracy or credibility of an appraisal.
Understanding the intricate details of the commercial appraisal process can empower property owners to make informed decisions. Whether you're applying for a loan, needing a quick turnaround, or dealing with a dispute, being prepared and knowledgeable is key to a smooth appraisal process. Remember, an appraiser is your guide, not an advocate, offering an unbiased perspective that can illuminate the path ahead.