Valuation Process

Valuation
Process
A Step-by-Step Guide to
the Real Estate
Valuation Process
Step One: Understand the Purpose
and Function of Your Appraisal
This is the most crucial step of the process. First, we determine the purpose of your appraisal.
Most often it is to estimate the market value of the property (other types of value including use
value, value-in-use, investment value, going concern, insurable value, assessed value, and fair
value). Next, we must understand the function of your appraisal. Are you looking to buy or sell
property? Are you looking to re-mortgage? Do you need to file an insurance claim for damage?
Are you looking to appeal your property taxes? By understanding the purpose and function of the
appraisal, we can ensure that the results are not only interpreted correctly but will also give a full
and complete picture to whomever is receiving the valuation report when complete, be it a buyer,
seller, lender, insurance company or even a government entity. Another important factor is what
the property is currently being used for. Is it an office building? Or is it a cement factory? A
portfolio of multiple properties? This allows us to figure out the two most important pieces of
any appraisal – determining the types of data we will need to collect and what is the best
approach to value we will be using. This conversation and information allow our team to fully
define the scope of the project so everyone fully understands the terms and expectations.
Step Two: Comprehensive Onsite
Inspection of Your Property
Our expert appraiser begins the process with an in-depth conversation with the property owner or
contact. This is a crucial step for us to find information we would not be able to uncover
otherwise because who else knows the property better than the owner or the operator? We then
conduct a comprehensive inspection of the site, which may include, multiple visits to your
property, looking at the entire external and internal footprint of the structure, and considerations
are also made for the furnishings, trade fixtures or fixed equipment, etc. During the inspection
process, we are looking at multiple factors. We will gather general information, such as the age,
size and use of the property and equipment, any recent improvements to the site or alternately
improvements needed. We document the overall structure and construction, the layout versus the
functionality, as well as the condition of the mechanical systems like electrical, heating and
plumbing. All these pieces of a property can, and do, affect its value.
Step Three: Collect Data on Your
Property
Along with the information you provide us for your property and what we gather via the site
visit, we conduct a deep discovery process to compile additional data. We pull data from
premium worldwide databases that are updated daily. This up-to-date data is essential to ensure
that the information and analysis we provide in our findings are always current. General real
estate trends, including the local economy and population growth or decline, are also essential
information we collect. Site-specific data and comparable properties, if applicable, are also
needed benchmarks. We dig into research to make sure we understand the nuances of every area
we work in. This information along with your stated purpose allows us to determine the best
approach to value, using one or more of these three valuation options:
• Cost – (the principle of substitution) ensures that no buyer or renter will pay more for a
property than it would cost to build, buy or rent a similar property.
• Sales Comparison – compares the property being appraised with similar properties that have
been sold.
• Income Capitalization – looks at the value of an investment property against the value of the
future income that the property could produce.
Our team will estimate value using all three methods, then reconcile the various estimates to
determine the best value to use in the final report based on all the data collected.
Step Four: Compose and Submit
Your Real Estate Valuation Report
While many in our field write narrative appraisal reports by filling in the blanks in a computer
program, we always custom write each page of our client reports. And always with the legal
mindset imparted on every team member by our founder, Charles Argianas, who holds a law
degree. Your report will do more than give you a single number for your valuation. It will allow
you and any other intended user interested in the property to fully understand the impact of every
aspect, from its history, to the regional analysis of the area, to the zoning of the land, to the
demographic profile of the area, to countless other factors. We adhere to the strictest government
and industry guidelines; all our reports are prepared in accordance with the Uniform Standards of
Professional Appraisal Practice (USPAP). If the valuation is related to a federally related
transaction, we adhere to Title XI of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (FIRREA), and the Appraisal Institute. Once we complete our report,
we will set up a meeting to review it with you and welcome any questions or concerns you may
have. We are here for you throughout the appraisal process from the time we are retained until
after you receive your final report from us.

Valuation Process

Uploaded by

Copyright:

Available Formats

Valuation Process

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Valuation Process

Uploaded by

Copyright:

Available Formats

Valuation

You might also like