A Better Understanding of Appraisals and Appraisers

The first part of a two-part series on better understanding of appraisals and appraisers is presented. Appraisals are most commonly used for purchase/sale decisions, loan collateral, and a variety of other matters, including condemnation, ad valorem taxation, environmental impact, business breakups, family breakups, estate and gift taxation, and insurance claims. Common matters in which appraisers assist include disputes about 1. market value amount, 2. market value vs. value in use, 3. exclusion of intangible value, 4. approaches used to derive market value, and 5. fair and equitable issues concerning equal treatment of all property of the same class. An appraiser is a professionally qualified person who, for a fee, offers an opinion of the value of real estate. Since 1992, however, a real estate appraiser must be licensed or certified in order to appraise property in a federally related transaction.