INTRODUCTION TO THE APPRAISAL PROCESS

Appraisal is the act or process of estimating value and providing an opinion concerning that value. The opinion can be verbal or written. Written reports can range from a lengthy document (a narrative report), or a summary report (commonly called a form report ).

Interestingly, appraisal is not just relegated to professionals, thousands of consumers perform the function everyday. What differentiates individuals is knowledge and sophistication in performing valuations.

Over the years, the appraisal process has been formalized through the use of sequential steps leading to an opinion of value. In a detailed narrative report, eight steps are fully detailed to enable the reader to follow the logical a___ysis leading to an estimate of value:

STEP 1 Define the Problem
STEP 2 Preliminary Inspection and Planning the Work
STEP 3 Data Collection and a___ysis
STEP 4 Apply the Cost Approach
STEP 5 Apply the Direct Comparison Approach
STEP 6 Apply the Income Approach
STEP 7 Reconciliation and Final Estimate
STEP 8 Write the Appraisal Report

In a form report, the same eight steps are taken, however the written document summarizes details in a systematic and precise fashion. Form reports are most commonly a__ociated with appraisals relating to mortgage financing etc., in which individuals receiving the report have experience and training in the field.

Appraisers in the Marketplace

Curiosity

Narrowing the Focus

Appraisers must be aware of general trends as well as specifics concerning the property. Several levels of data can positively or negatively impact value.

Perspective

The Professional Appraiser At Work

A recent interview by the Ontario Real Estate Times with Anne Appraiser, an accredited appraiser and member of OREA, sheds light on the full narrative report.

Click on the icon to view the conversation.

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