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APPRAISAL SERVICES
Michigan Commercial Real Estate Appraisals
Appraisal services of real property have been completed for various purposes. Some of these include absorption study, acquisition, appraisal review, condemnation, conversation easement, construction inspection, disposition, dispute resolution, easement analysis, eminent domain, financial work-out, federal bankruptcy, foreclosure, insurance, leased fee interest, leasehold interest, litigation support, market analysis, mortgage, partial interest, right-of-way and tax appeal. Request a quote now if you're interested in one of these appraisal services.
Overview
Definitions
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Appraisal: The act or process of developing an opinion of value (USPAP 2012 Ed.)
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Real Estate: An identified parcel or tract of land, including improvements, if any. (Appraisal of Real Estate, 14th Ed.)
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Real Property: The interests, benefits and rights inherent to ownership of real estate. (Appraisal of Real Estate, 14th Ed.)
Type of Properties Appraised
Appraisal Valuation Process
There are multiple steps in the appraisal valuation process. Some reports can be completed in a couple of weeks while others can take months. Here's a simplified look at how an "appraisal report" is prepared.
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Identify Problem
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An appraiser must define the who, what, where, when and why of the subject property
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Who are the clients and intended users
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What is the purpose of the assignment (i.e. valuing the "as is" value or "as complete" value after a renovation or improvement to vacant land)
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Where is the subject and what are its characteristics (the neighborhood, site and building)
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Why is the property being appraised (refinancing, potential sale, etc.)
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Determine Scope of Work
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An appraiser defines the scope of work by answering how the problem will be solved.
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How much research and analysis is necessary via a market analysis and highest and best use analysis and which valuation approaches should be used
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Three Valuation Types
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Income Approach: A value is found by anticipating future benefits (income) from property ownership.
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Sales Comparison Approach: A value is found by analyzing recent sales or current sale offerings of similar buildings in the subject's market area.
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Cost Approach: A value is found by adding the estimated value of the land with the cost of building construction minus depreciation.
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Apply the Solution
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Also called the final reconciliation of value.
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Appraiser examines the valuation types used and determines a final value.
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Appraisal Process
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